MIT News - Economicshttp://newsoffice.mit.edu/topic/miteconomics-rss.xml
MIT News is dedicated to communicating to the media and the public the news and achievements of the students, faculty, staff and the greater MIT community.enMon, 02 Mar 2015 17:15:00 -0500Five MIT researchers win Sloan Research Fellowships http://newsoffice.mit.edu/2015/sloan-research-fellowships-0302
Faculty specializing in mathematics, chemistry, mechanical engineering, and economics among 126 selected.Mon, 02 Mar 2015 17:15:00 -0500News Officehttp://newsoffice.mit.edu/2015/sloan-research-fellowships-0302<p>Two mathematicians, a chemist, a mechanical engineer, and an economist from MIT are among the 126 American and Canadian researchers awarded 2015 Sloan Research Fellowships, the Alfred P. Sloan Foundation recently announced.</p>
<p>New MIT-affiliated Sloan Research Fellows are: Jörn Dunkel, an assistant professor of mathematics; Emmy Murphy, an assistant professor of mathematics; Bradley Pentelute, the Pfizer-Laubauch Career Development Assistant Professor of Chemistry; Themistoklis Sapsis, an assistant professor of mechanical engineering; and Heidi Williams, the Class of 1957 Career Development Assistant Professor of Economics.</p>
<p>Awarded annually since 1955, the Sloan Research Fellowships are given to early-career scientists and scholars whose achievements and potential identify them as rising stars among the next generation of scientific leaders. This year’s recipients are drawn from 57 colleges and universities across the United States and Canada.</p>
<p>“The beginning of a one’s career is a crucial time in the life of a scientist. Building a lab, attracting funding in an increasingly competitive environment, and securing tenure all depend on doing innovative, original high-quality work and having that work recognized,” said Paul L. Joskow, president of the Alfred P. Sloan Foundation, in a press release. “For more than 50 years the Sloan Foundation has been proud to celebrate the achievements of extraordinary young scientists who are pushing the boundaries of scientific knowledge.”</p>
<p>Administered and funded by the foundation, the fellowships are awarded in eight scientific fields: chemistry, computer science, economics, mathematics, evolutionary and computational molecular biology, neuroscience, ocean sciences, and physics. To qualify, candidates must first be nominated by fellow scientists and subsequently selected by an independent panel of senior scholars. Fellows receive $50,000 to be used to further their research.</p>
<p>For a complete list of this year’s winners, visit: <a href="http://www.sloan.org/fellowships/2015-sloan-research-fellows/">http://www.sloan.org/fellowships/2015-sloan-research-fellows/</a></p>
<p>For more information on the Alfred P. Sloan Foundation, visit: <a href="http://www.sloan.org/">http://www.sloan.org/</a></p>
School of Science, School of Engineering, SHASS, Awards, honors and fellowships, Mathematics, Chemistry, Mechanical engineering, Economics, Sloan fellows, FacultyWatching how the money flowshttp://newsoffice.mit.edu/2015/watching-how-money-flows-david-singer-0226
David Andrew Singer maps the influence of global capital flows among governments, banks, and individuals around the world.Thu, 26 Feb 2015 16:19:01 -0500Steve Calechman | MIT Industrial Liaison Programhttp://newsoffice.mit.edu/2015/watching-how-money-flows-david-singer-0226<p>Financial activity and regulations have a delicate relationship. Construct too many rules and the flow of needed money can dry up. Have too few and it can lead to questionable behavior. It’s in this environment that David Singer works.</p>
<p>The MIT associate professor of political science studies international political economy, with two main focuses. One is banking crises and why some countries get hit harder than others. The second is the effect of money sent home by immigrants. At the core of both is how reliable funds can provide comfort and assurance to — and also inspire complacency in — both people and governments. As Singer says, it’s a dependability that can be tracked and that can provide a barometer to financial institutions and investors trying to find the elusive quality of predicting future behavior.</p>
<p><strong>Trying to rein in activity</strong><br />
<br />
With banking crises, Singer tries to answer two questions: Why do they happen, and why are some economies more stable than others? The answers hinge on the amount of a country’s financial activity and the relationship between the conventional banking industry and non-banking financial institutions, he says. As an example, take the United States and Canada in 2008; the former had economic trouble while the latter experienced comparatively minor upheaval.</p>
<p>One possible reason, Singer says, is that the United States has more developed stock and derivative markets, and this vibrancy created incentives for bankers to take more risks than was probably prudent. Singer says that by understanding those kinds of factors, along with what regulations existed, precautions could be taken to prevent future downturns.</p>
<p>One possible idea is reinstating provisions of the Glass-Steagall Act. The Great Depression-era legislation separated commercial and banking activities and affiliations, but by the 1980s and '90s, the restrictions had eroded. Singer doesn’t necessarily believe that regulations would be the ultimate fix. “It doesn’t seem to matter if there’s a separation of banking and investment banking,” he says.</p>
<p>The central element with economic vulnerability is the amount of market activity, and no amount of policies would eliminate risk, Singer says. Adding to the challenge is that bank owners reap the rewards of risk-taking, but society as a whole bears the costs of failures. Regulations, though, aren’t without merit, as they bring a focus on the drivers and incentives. One move that might help in the United States is instituting capital requirements, dictating how much a bank needs to hold in relationship to its lending portfolio. In the past, the percentage wasn’t high enough, and shoring that up would be an important first step in maximizing stability, Singer says.</p>
<p>With any kind of regulation, timing is key. There’s only a finite period to address a collapse. Once an economy improves, motivation lessens and inertia sets in. Singer says that the United States has only two more years to adopt any changes. While the banking and financial world may resist, he says that it, along with the government, has a mutual interest in being as crisis-proof as possible.</p>
<p>There will be a rebalancing of the global economy in the next several years as money returns to the United States and Europe. Attention will be paid to how much risk banks will be taking. In order to do business, people will need to feel that financial institutions will be there in 20 years. “I think it helps the banks if the public is confident in their stability,” Singer says.</p>
<p><strong>When money comes back home</strong></p>
<p>Singer also studies the effect of remittances, the money sent home by immigrants. In 2013, the amount to developing countries was estimated at $400 billion. For some countries, it’s a major source of financing — for the Philippines, for example, it’s 10-12 percent of the country's gross domestic product, Singer says. In some instances, the influx is not a surprise; if a natural disaster hits, for instance, money comes in. In that respect, remittances are counter-cyclical to traditional financing; normally, when a national crisis occurs investors start disappearing.</p>
<p>The big question to be answered is how this money influences how governments manage currencies and spending. Singer says that records go back to the 1970s showing that remittances have been consistent. That reliability has a few effects. For one thing, it’s easier for governments to fix their exchange rates. They give up the ability to quickly re-adjust in response to emergencies, but the dependability can be tracked. “We can understand why governments are making the decisions that they are,” Singer says.</p>
<p>Governments in countries with steady remittances also tend to spend more. One reason is that remittances lead to increased tax revenues — households tend to spend the money immediately on basic needs. Another is that remittances make it easier for governments to borrow from international markets. In the face of crises, the money provides assurance to investors. The governments, in turn, are a better credit risk and pay lower borrowing premiums. “Remittances function as an automatic stabilizer,” Singer says.</p>
<p><strong>The downside of easy money</strong></p>
<p>Some questions still exist with remittances. One is the future role of banks. The ease of having an account and sending money home bring concerns such as money laundering and illicit financing. If banks are going to attract remittance business, they would need to track such activity and institute safeguards. The risk is that overly strict regulations and costs could inhibit people from sending money back home or force them to bypass banks — instead using other means such as cell phones, which can easily be used to transfer money. These conditions, says Singer, are going to force banking institutions to figure out how central they want to be in the process and how they want to navigate this landscape.</p>
<p>One school of thought is that remittances help to prop up autocratic leaders and facilitate political corruption, by enabling households to turn their backs on the government because they are able to provide for their own security and welfare. Singer says that this argument is overblown. “No household would relinquish its demands on the government for paved roads, clean water, or pensions simply because a family member lives abroad and sends money home,” he says. “Instead, it’s reasonable to assume families would rather not be dependent on the relative and would prefer local employment opportunities.” This could, in fact, be one reason why remittances are correlated with greater government expenditures, which often support job creation, he says.</p>
<p>The larger issue — and the greater challenge — for Singer is that the financial landscape is ever-fluid. Remittances are easy to overlook and dismiss, and much about them remains unknown by the nature of the regions they affect. But they can play a key role in economic stability and potential investment returns. “Future research will help political leaders and financial managers to understand the calculus of government decision-making in this new era of globalization,” Singer says, “and provide clues as to how to prevent financial crises and economic downturns.”</p>
David Andrew SingerEconomics, Political science, Finance, Banking, Research, SHASS, Profile, Immigration3 Questions: Amy Finkelstein on testing health care systemshttp://newsoffice.mit.edu/2015/3-questions-amy-finkelstein-random-trials-health-care-0212
MIT economist explains why randomized trials can improve medical care.Thu, 12 Feb 2015 14:00:00 -0500Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2015/3-questions-amy-finkelstein-random-trials-health-care-0212<p><em>About 80 percent of studies of U.S. medical interventions use randomized controlled trials (RCTs), the gold standard of laboratory research. But only about 18 percent of studies of U.S. health care delivery use RCTs. That can and should change, suggests Amy Finkelstein, the Ford Professor of Economics at MIT, in a </em>Science<em> piece co-written with MIT researcher Sarah Taubman. If so, they assert, researchers who find new ways of applying RCTs to our medical system will be able to produce compelling answers to pressing questions. Finkelstein, an experienced practitioner of RCTs in U.S. health care, helped launch J-PAL North America, a recently formed branch of MIT’s Abdul Latif Jameel Poverty Action Lab, which uses RCTs to test policy questions and social programs. </em>MIT News<em> discussed the issue with Finkelstein. </em></p>
<p><strong>Q.</strong> In the <em>Science</em> piece, you say that randomized evaluations of policy and delivery should be “closer to the norm than the exception.” What is the power of randomized evaluations as a research method?</p>
<p><strong>A.</strong> It is not always obvious what the effect of a given policy is. For example, what is the impact of covering the uninsured with health insurance? Comparisons of the insured and the uninsured often indicate that those with insurance are in worse health than those without insurance. Would it be right to conclude, therefore, that health insurance makes individuals sicker? Or, more reasonably, are individuals who are in poor health more likely to seek out health insurance?</p>
<p>Random assignment solves this problem of inference. In randomized evaluations, individuals are randomly selected to receive an intervention, such as health insurance. Those individuals who are not selected form a comparison group. Because the selection process is random, the two groups are similar in every respect, except that one group receives the intervention, while the other does not.</p>
<p>Therefore, if after the intervention is implemented, the group that received the intervention has different outcomes — is more or less healthy, or has higher or lower medical expenditures — we know that these differences were caused by the intervention.</p>
<p>This clear attribution of what is due to the intervention is the key strength of randomized evaluations. The results are transparent, easy to explain, and credible. The resulting discussion can focus more comfortably on the implication of the results, rather than on the methods and their validity.</p>
<p><strong>Q.</strong> What are the main barriers to developing more randomized trials in health care — and how can they be addressed?<br />
&nbsp;</p>
<p><strong>A.</strong> One common concern is that randomized evaluations require substantial resources, both in terms of time and cost. It is important to distinguish between the costs of prospective research in general, and the [added] cost of doing that prospective research through a randomized design.</p>
<p>The standard model for randomized controlled trials in medical interventions is expensive and time-consuming. Historically, most randomized evaluations in health care delivery have followed this same model, which involves screening, recruiting, and obtaining informed consent from individual subjects before randomly assigning them to a treatment or control group. This process, in combination with collecting primary follow-up data, can be difficult and labor-intensive.</p>
<p>But we suggest there is an alternative and less expansive approach for many randomized evaluations in health care delivery, where safety is often not an issue —as it may be in medical trials. Randomization of who is offered an intervention can be conducted on a set of potentially eligible individuals with a waiver of informed consent. This approach allows for larger trials with more representative samples, because it does not require individual recruitment. At the same time, it does not interfere with estimating an intervention’s causal effect, even if there is imperfect adherence, as when not all those offered the intervention choose to enroll.</p>
<p>In addition, individuals can be followed passively in administrative data, which is used and stored for reasons other than the study — such as for insurance claims, hospital discharges, or electronic medical records. This can often allow researchers to examine a wide range of impacts at substantially lower cost than primary data collection.</p>
<p>Randomized evaluations are particularly appropriate when programs are oversubscribed, rolled out in a gradual fashion, or initially tested with pilot programs. In those cases, randomization can be seen as the fairest way of determining participation, while simultaneously allowing for rigorous measurement of the program’s impact. The Oregon Health Insurance Experiment — a randomized evaluation of the impact of covering low-income uninsured adults with Medicaid, which Harvard’s Katherine Baicker and I have been leading — came about because the state of Oregon decided that random selection by a lottery was the fairest way to allocate a limited number of Medicaid slots.</p>
<p><strong>Q.</strong> You would like to see more randomized evaluations that are actively designed by researchers themselves. How can this help us develop clearer, more specific answers to major health care delivery issues?</p>
<p><strong>A.</strong> There is a large range of open questions in health care delivery that have the potential to be evaluated through RCTs. One natural area is in insurance design, where there have already been a few large RCTs on the effect of individual coverage, such as the 2008 Oregon Health Insurance Experiment and the RAND Health Insurance Experiment from the 1970s. Some important current issues in insurance design that could be studied through randomized evaluation concern the impacts of how insurers reimburse providers — such as the possibility of paying more for higher-value care, or covering a limited network of providers.</p>
<p>Another natural area for randomized evaluations concerns the impact of interventions designed to bring health care practice more in line with consensus recommendations. In almost every area of medicine, there is evidence that individuals do not receive all the care that is recommended, while receiving care that is not recommended. One can imagine a wide range of potential randomized interventions across patients, and/or across providers, to examine the impact of interventions designed to bring practice more in line with recommendations. These could make use of tools including financial and nonfinancial incentives, information, defaults, and nudges, as well as decision-support tools. One could study not only the impact of these different tools on compliance with recommended care, but also, in turn, the impact of that recommended care on “downstream” health care use and health outcomes.</p>
<p>Of course, not everything is appropriate for study through randomized evaluation. For example, if we are interested in how marketwide changes in health insurance coverage &nbsp;— such as the major expansions of Medicaid under the Affordable Care Act — affect health care use and health outcomes, a randomized evaluation of covering individuals with insurance may not capture the full systemwide effects, and randomizing expansions across markets is unlikely to be feasible or appealing.</p>
<p>At the same time, however, some system-level interventions can be fruitfully studied through random assignment. For example, innovation in the payment structure for health care providers, including bundling payments for episodes of care and creating shared saving contracts, is emerging as a major theme in health policy. As these marketwide payment mechanisms expand to take on new groups of patients, one could randomize which patients are included in order to study some of their impacts.</p>
Amy FinkelsteinResearch, SHASS, Economics, Health care, MedicineIs the medical match fair?http://newsoffice.mit.edu/2015/position-demand-influences-medical-residents-salaries-0127
Study finds the demand for positions strongly influences medical residents’ salaries. Tue, 27 Jan 2015 00:00:00 -0500Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2015/position-demand-influences-medical-residents-salaries-0127<p>When medical-school graduates apply for their residencies, they use a centralized clearinghouse that matches applicants with jobs. This system has sometimes been challenged, such as in a lawsuit several years ago that claimed salaries of residents were reduced by this centralized matching method.</p>
<p>But a forthcoming study by an MIT economist indicates that demand for a limited number of desirable residency positions can keep salaries low — and introduces a new way of assessing that demand despite incomplete data that has previously restricted analysis of the issue.</p>
<p>“Salaries will likely remain low unless residency programs can increase the number of positions,” says Nikhil Agarwal, an assistant professor of economics at MIT, and author of the paper on the subject.</p>
<p>On average, Agarwal’s study finds, salaries of medical residents are lowered by an average of $23,000 due to the demand for slots. As the study puts it, residents are willing to accept an “implicit tuition” in their wages in return for experience and prestige. In the long run, residencies may be a worthwhile tradeoff for doctors establishing themselves in the profession, even with seemingly reduced wages. &nbsp;</p>
<p><strong>Determining demand</strong></p>
<p>Agarwal’s paper, to be published in the <em>American Economic Review</em>, is based on data from 2003 to 2011 gathered by the National Graduate Medical Education census.</p>
<p>The central clearinghouse — the National Residency Matching Program (NRMP) — matches about 25,000 medical residents annually. Incoming residents rank the positions they would most like to have, and an algorithm matches these choices with the ranked preferences of the medical programs.</p>
<p>A 2002 lawsuit asserted that the residents have limited bargaining power because they are assigned to positions and cannot receive multiple job offers, unfairly lowering their compensation. That suit was eventually dismissed in 2004, a few months after Congress passed an antitrust exemption for the NRMP system.</p>
<p>But that resolution of the lawsuit did not resolve the question of whether or not the clearinghouse does affect residency salaries. As of 2010, residents had a mean salary of about $47,000, compared to $86,000 for physician assistants, who do comparable work. Medical residents also have notably long workweeks and shifts, which themselves are the subject of intermittent public debate.</p>
<p>Agarwal’s study finds a new way of analyzing the compensation issue in the face of limited information. He did not have access to the ranked lists of jobs that applicants submit to the NRMP, nor to the lists of preferred candidates that medical programs submit. Even so, Agarwal was able to study the matched pairs of residents and positions, along with some additional descriptive data, such as geographic location, and determine demand on that basis.</p>
<p>The key to the analysis, Agarwal says, is “the fact that there are multiple residents in the same program. That tells you a lot about the residency program’s preferences for residents. Once you figure out that side of the market, you’re in business.”</p>
<p>For instance, Agarwal adds, “If a program [decides] to hire residents from [highly ranked] medical schools with similar licensing-exam test scores, then everybody it’s matched with will be similar on those characteristics. But if it doesn’t care about prestige of the medical school as much, there might be people from all kinds of medical schools, but their licensing-exam scores will be similar.” Partly by building a picture of those preferences and measuring it against the characteristics of the class of applicants, it is possible to estimate how many qualified applicants are available for residency positions.</p>
<p><strong>An ‘imperfect’ market</strong></p>
<p>An underlying implication of Agarwal’s conclusions is that the idea of a perfectly competitive, uniform market driving salaries does not ultimately hold up to scrutiny when it comes to medical residencies. There appear to be clumps of jobs considered particularly desirable, leading to uneven relationships between supply and demand within the overall residency job market.</p>
<p>“In [my] theory, you get a situation where people are not indifferent” in terms of job preferences, Agarwal notes.</p>
<p>For his part, Agarwal, who focuses on the growing field of market design, believes this method of determining preferences can be applied to other domains as well. &nbsp;He is continuing to do research in the area of school choice, among other topics.</p>
Economics, SHASS, Medicine, Research, PolicyForbes hails MIT standouts in science, education, energy, technology, and health carehttp://newsoffice.mit.edu/2015/forbes-30-under-30-hails-mit-standouts-0108
11 MIT affiliates and more than 30 alumni are identified as movers, makers, and game changers in their respective fields.Thu, 08 Jan 2015 14:43:01 -0500Stephanie Eich | MIT Spectrumhttp://newsoffice.mit.edu/2015/forbes-30-under-30-hails-mit-standouts-0108<p><em>Forbes</em>&nbsp;recently released its <a href="http://www.forbes.com/30under30/#/" target="_blank">"30 under 30" lists</a> for 2015. For its fourth annual celebration, the publication has selected 600 movers, makers, and game changers in 20 fields — all under the age of 30.&nbsp;</p>
<p>This year’s lists are populated with numerous MIT faculty, students, and alumni. Read on to learn more about current faculty, postdocs, and students who were among this year’s honorees, and see the MIT Alumni Association's <a href="http://slice.mit.edu/2015/01/08/forbes-30-under-30-2015/" target="_blank"><em>Slice of MIT</em></a> for a complete list of alumni honorees.&nbsp;</p>
<p>SCIENCE</p>
<p><a href="http://mrl.illinois.edu/news/motivated-family-illinois-innovation-prize-winner-helps-create-flexible-piezoelectric-energy-de" target="_blank">Canan Dagdeviren</a>, postdoctoral associate, Langer Lab<br />
A postdoctoral associate in the Langer Lab, Dagdeviren is developing implantable electronic chips that are powered by the body, eliminating the need for batteries. In the future, such devices could be used as pacemakers, implantable defibrillators, and cardiac monitors.&nbsp;</p>
<p><a href="http://www.forbes.com/pictures/ggik45ekh/eran-hodis-29/" target="_blank">Eran Hodis</a>, MD/PhD student, Harvard-MIT Program in Health Sciences and Technology<br />
Hodis has discovered a pair of mutations in the genomes of melanoma cells that is among the most common mutations in all types of cancer. His finding helps explain why cancer cells increase the production of the enzyme telomerase, making the cells virtually indestructible.&nbsp;</p>
<p><a href="http://odge.mit.edu/2013/12/hsu-scott/" target="_blank">Patrick Hsu</a>, postdoctoral fellow, Broad Institute<br />
Hsu’s research has contributed to a new, incredibly accurate way to edit the human genome. Using an engineered version of a protein called Cas9, researchers are able to easily and efficiently add or delete genes in living cells. Hsu’s work is now being used to develop new methods of human gene therapy.&nbsp;</p>
<p><a href="http://newsoffice.mit.edu/2014/xu-liu-and-steve-ramirez-win-2014-american-ingenuity-award-1027" target="_self">Steve Ramirez</a>, PhD student, Picower Lab<br />
In a significant breakthrough in neuroscience, Ramirez was part of the team that documented the ability to both transform negative memories into positive ones, and create false memories in the brains of mice. Such work is expected to contribute to new treatments for psychiatric disorders such as post-traumatic stress disorder.&nbsp;</p>
<p><a href="http://newsoffice.mit.edu/2014/research-reveals-gender-gap-nations-biology-labs-0630" target="_self">Jason Sheltzer</a>, PhD student, Amon Lab<br />
Sheltzer authored a recent study documenting the gender gap in the nation’s biology labs. His research revealed that in the labs of “elite” male faculty — those who have won prestigious awards such as the Nobel Prize — women are greatly underrepresented. This difference was not present in the labs of elite female researchers.&nbsp;</p>
<p>EDUCATION</p>
<p><a href="http://www.forbes.com/pictures/lmh45mfhd/vinit-sukhija-25/" target="_blank">Vinit Sukhija</a>, graduate student, MIT Sloan School of Management<br />
In addition to being a full-time graduate student at Sloan, Sukhija is the manager of Teach for America’s social entrepreneurship and innovation initiative. In this role, he’s been instrumental in launching new education ventures and forging strategic partnerships with leading education backers such as Imagine K12 and NewSchools Venture Fund.&nbsp;</p>
<p>ENERGY</p>
<p><a href="http://newsoffice.mit.edu/2013/meet-members-of-the-class-of-2017-0904" target="_blank">Sara Volz</a>, Class of 2017<br />
Before arriving at MIT, Volz built a lab in her bedroom to research the use of algae to make biofuels. Using herbicide to kill off the weaker strains of algae, she produced a strain of “super producers” that increased her algae’s oil production by 300 percent. Volz’s research earned her the top prize in the 2013 Intel Science Talent Search.&nbsp;</p>
<p>ENTERPRISE TECHNOLOGY</p>
<p><a href="http://people.csail.mit.edu/fadel/" target="_blank">Fadel Adib</a> SM '13, PhD student, Computer Science and Artificial Intelligence Laboratory, NETMIT Lab<br />
A member of the Networks@MIT group, Adib helped created WiTrack, a spin on Wi-Fi that uses a radio signal — just 1 percent as strong as Wi-Fi and .01 percent of your smartphone's signal — to track movements with incredible accuracy. Recently the team demonstrated they can detect gestures as subtle as the rise and fall of someone's chest, allowing them to determine a person's heart rate with 99 percent accuracy. Such research holds promise for health-tracking apps, baby monitors, and military and law enforcement purposes.</p>
<p>HEALTH CARE</p>
<p><a href="http://economics.mit.edu/faculty/agarwaln" target="_blank">Nikhil Agarwal</a>, assistant professor, Department of Economics<br />
Agarwal studies the empirics of matching markets, including the matching system that determines where doctors do their medical residencies. He has created models showing that a limited number of positions at programs that provide the best training results in prestigious hospitals paying less than they should.&nbsp;</p>
<p><a href="http://scholar.harvard.edu/bick/biocv" target="_blank">Alex Bick</a>, MD/PhD student, Harvard-MIT Program in Health Sciences and Technology<br />
Bick uses computers to analyze the vast amounts of genetic data produced by scientists and physicians. Among his findings: the presence of different mutations influence how people respond to high-blood-pressure medications. Blick is the author of 15 papers, and his work has been published in <em>Science, Nature Genetics, </em>and the <em>Journal of the American Medical Association.&nbsp;</em></p>
<p><a href="http://spectrum.mit.edu/continuum/novel-device-makes-drug-delivery-safer-more-patient-friendly/" target="_blank">Christopher Lee</a>, MEMP PhD student, Harvard-MIT Program in Health Sciences and Technology<br />
Lee is a cofounder of Recon Therapeutics, which has created a user-friendly device for self-administering biologic injections. Lee’s academic research is focused on helping patients expedite the passage of urinary stones, a condition that affects more than 12 percent of men and 6 percent of women in the U.S.</p>
Forbes 30 under 30Awards, honors and fellowships, Students, Undergraduate, Graduate, postdoctoral, Faculty, Chemical engineering, Harvard-MIT Health Sciences and Technology, Broad Institute, Picower Institute for Learning and Memory, Biology, Economics, School of Engineering, School of Science, SHASS, Sloan School of Management, Electrical Engineering & Computer Science (eecs), Computer Science and Artificial Intelligence Laboratory (CSAIL)Of yeast, ecology, and cancerhttp://newsoffice.mit.edu/2014/yeast-ecology-and-cancer-jeff-gore-1229
Jeff Gore’s work with baker’s yeast helps ecologists respond to trends, like vanishing fisheries and collapsing honeybee colonies.Mon, 29 Dec 2014 13:27:01 -0500http://newsoffice.mit.edu/2014/yeast-ecology-and-cancer-jeff-gore-1229<p>A physicist, a mathematician, and an economist walk into a bakery. It sounds like the opening of a witty one-liner, but for Jeff Gore, the Latham Family Career Development Assistant Professor of Physics at MIT, it marks the beginning of a career.</p>
<p>Gore — who actually is a physicist, mathematician, and economist (he also studied electrical engineering and computer science at MIT as an undergraduate and studied biophysics as a graduate student at the University of California at Berkeley) — now uses his observations of the behavior of baker’s yeast as a way to translate heady theories about evolution and ecology into practical indicators that an ecosystem is headed for a change. His work is already beginning to help field biologists and ecologists detect and respond to troubling environmental trends such as vanishing fisheries and collapsing honeybee colonies.</p>
<p>“There are a lot of really beautiful ideas in theoretical ecology but it’s difficult to test those ideas with any sort of experiment,” says Gore. “We see an exciting opportunity to take our experimentally tractable microbial communities and do theoretically motivated experiments.”</p>
<p>Gore’s approach to the study of ecology and evolution is guided by the idea that complex systems, such as populations of living organisms, follow universal patterns of behavior. Those patterns can be expressed mathematically with formulas that exhibit special features, such as stable states and tipping points. A tipping point, a phenomenon popularized by Malcolm Gladwell in his book, "The Tipping Point," is a critical moment of change, such as the moment when a pot of water accumulates enough heat to boil, or, more alarmingly, the moment the atmosphere accumulates enough heat that climate patterns shift irreversibly.</p>
<p>Tipping points occur in populations of organisms that cooperate to survive. For instance, baker’s yeast collectively breaks sucrose into smaller sugars that can be used as fuel. This team effort helps stabilize the population by ensuring there is enough fuel to go around. “But if the population gets too small, it can’t break down enough sugar to survive,” says Gore. “The population collapses.”</p>
<p>Gore’s studies of thriving yeast colonies and colonies under duress have uncovered telling signs that a colony is on the verge of tipping into oblivion. In one study, Gore and colleagues found that colonies nearing a tipping point take longer to recover from challenges, such as an influx of salt that substantially slows the growth of the yeast population. “The recovery time grows as you get closer to the tipping point,” says Gore. “We can measure this in the lab with yeast.”</p>
<p>This recovery slowdown isn’t just a phenomenon seen in baker’s yeast. Rather, it will occur in other populations with similar cooperative foundations, such as packs of wolves that hunt collectively, schools of fish that travel together, or colonies of bees that work together. Because of this universality, a slowdown in recovery could become an early warning that a population is on the verge of collapse. “It may be possible to anticipate that a tipping point is approaching before we cross that threshold, which is important because once a threshold is crossed, it can be very difficult to reverse,” says Gore.</p>
<p>Recently, Gore and graduate student Lei Dai have begun applying these findings in collaboration with Christina Grozinger, a honeybee biologist at Pennsylvania State University. Honeybee colonies are collapsing at an alarming rate worldwide and researchers have been looking for new ways to approach understanding and preventing colony collapse disorder. In unpublished work, the researchers found that honeybee colonies need a critical mass of bees to survive. “Smaller colonies all collapse,” says Gore.</p>
<p>The work is a first step towards applying the warning signs Gore sees in yeast to natural ecosystems and even complex biological systems, such as cancer. “Depending on the population you’re talking about, you either want it to collapse or not,” he says. “In the case of a tumor, we do.”</p>
<p>In an effort to create laboratory experiments that more closely resemble natural ecosystems, Gore is beginning to work with microbial colonies that involve more than one species. “We want to understand how the dynamics play out when we have more complex communities,” he says.</p>
Jeff GorePhysics, Mathematics, Ecology, Economics, Biology, School of Science, Faculty, Profile, CancerSHASS announces 12 research fund recipients for 2015http://newsoffice.mit.edu/2014/shass-announces-12-research-fund-recipients-2015
Wed, 17 Dec 2014 17:04:01 -0500School of Humanities, Arts, and Social Scienceshttp://newsoffice.mit.edu/2014/shass-announces-12-research-fund-recipients-2015<p>The School of Humanities, Arts, and Social Sciences (SHASS) <a href="http://shass.mit.edu/inside/resources/internal/research" target="_blank">Research Fund</a> supports MIT research in the&nbsp;humanities, arts, or social sciences that shows promise&nbsp;of making an important contribution to the proposed&nbsp;area of activity. The projects funded in the&nbsp;2015 cycle include&nbsp;research on&nbsp;patient/doctor decision models; language technology for distance learning; U.S. class inequality; political violence; electronic music archives; gender and history; identity and power; new music and theater works;&nbsp;and housing.</p>
<p>Congratulations to the 2015 recipients:<br />
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<a href="http://mitgsl.mit.edu/faculty-staff-detail/60" target="_blank">Takako Aikawa</a>, senior lecturer in Japanese, to support the design of an effective curriculum to support the JaJan distance-language-learning tool, a collaboration between MIT and Kanda University of International Studies in Chiba, Japan. The aim is to assess the effectiveness of technology on language learning and to identify the most effective practices in the use of JaJan, which can provide a basis for the development of programs to teach all languages.<br />
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<a href="http://web.mit.edu/polisci/people/faculty/fotini-christia.html" target="_blank">Fotini Christia</a>, associate professor of political science, to support exploratory research into political attitudes toward sectarian violence and United States foreign policy in southern Iraq. By surveying pilgrims to Shiite religious sites in that region, Christia hopes to gain unique insight into the political and economic views held by Shiites from both Iraq and Iran.<br />
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<a href="http://web.mit.edu/music/facstaff/cuthbert.html" target="_blank">Michael Cuthbert</a>, the Homer Burnell Career Development Professor and an associate professor of music, to support the completion of the Electronic Medieval Musical Score Archive Project, which encodes the entire repertory of polyphonic music from 1300-1420 into computer-searchable formats.</p>
<p><a href="http://history.mit.edu/people/lerna-ekmekcioglu" target="_blank">Lerna Ekmekcioglu</a>, the McMillan-Stewart Career Development Assistant Professor of History, to support archival research associated with a monograph, tentatively titled "Suffering Remnants of an Ancient Christian Nation: A Gendered Reading of Modern Armenian History," which investigates gendered representations of the nascent state of Armenia in the aftermath of World War I.<br />
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<a href="http://history.mit.edu/people/robert-m-fogelson" target="_blank">Robert Fogelson</a>, professor of history and urban studies, to support travel and research toward a book project that explores the rapid decline of non-profit cooperative housing in New York City. The research will focus on the United Housing Foundation, a consortium of labor unions at the forefront of the non-profit housing movement, and Co-op City, the largest housing cooperative in the country.<br />
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<a href="http://history.mit.edu/people/eric-j-goldberg" target="_blank">Eric J. Goldberg</a>, associate professor of history, to support research toward a book project, tentatively titled "With Practice, Skill, and Cunning: Hunting and Identity in Frankish Europe, AD 312–987." The project will explore the changing mores of hunting in post-Roman Europe and its relationship to secular manhood, Frankish identity, and aristocratic power.</p>
<p><a href="http://web.mit.edu/music/facstaff/harrisf.html" target="_blank">Frederick Harris Jr.</a>, director of the MIT Wind and Jazz Ensembles, to support the production of a documentary film on the life of contemporary conductor and composer Stanislaw Skrowaczewski, entitled, "Through Music I Commune With the Universe: Stanislaw Skrowaczewski, A Life in Music."</p>
<p><a href="http://theaterarts.mit.edu/faculty/kohler.html" target="_blank">Anna Kohler</a>, senior lecturer in music and theater arts, to support the conversion of seminal theater performances from the past 35 years, currently on deteriorating videotape, to digital formats. The digital archive will then be available as a resource for MIT students and faculty.</p>
<p><a href="http://www.elenaruehr.org/wp/" target="_blank">Elena Ruehr</a>, lecturer in music, to support the final production and release of an album of six new original works for violin, viola, cello, and piano. These pieces — including "Lift," a composition for solo cello dedicated to 2014 Nobel Peace Prize co-recipient Malala Yousafzai — were written over the past 17 years at MIT.</p>
<p><a href="http://www.jayscheib.com" target="_blank">Jay Scheib</a>, director of theater arts, to support the development of a new interdisciplinary performance project, which uses the 18th-century "Sturm und Drang" movement as a point of departure to remix Goethe’s classic bildungsroman of unrequited love, "The Sorrows of Young Werther."</p>
<p><a href="http://economics.mit.edu/faculty/psomaini" target="_blank">Paulo Somaini</a>, assistant professor of economics, to support research that attempts to establish a model of patient/surgeon decision-making in order to analyze the benefits of cadaveric kidney transplants. This new empirically-based model will be used to construct and evaluate various alternatives to the existing market.</p>
<p><a href="http://web.mit.edu/anthropology/people/faculty/walley.html" target="_blank">Christine Walley</a>, associate professor of anthropology, to support the final stage of the Exit Zero Project, a collaborative transmedia history project undertaken in partnership with the Southeast Chicago Historical Museum. Exit Zero leverages personal narratives and archival materials from a former steel mill community in Southeast Chicago to document the impacts of deindustrialization and expanding class inequalities in the United States.<br />
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MIT SHASS is engaged in generating ideas to help meet the world's great&nbsp;challenges, and is home to research that has a global impact. With 13 academic fields, the school's research portfolio includes&nbsp;international studies; history; poverty alleviation;&nbsp;science,&nbsp;technology and society;&nbsp;literature;&nbsp;anthropology;&nbsp;digital humanities; linguistics;&nbsp;philosophy;&nbsp;global studies and languages;&nbsp;music and theater;&nbsp;political science; writing;&nbsp;security studies; comparative&nbsp;media;&nbsp;and economics.</p>
MIT SHASS Research FundAwards, honors and fellowships, SHASS, Faculty, Research, Music, Theater, Political science, Social sciences, Arts, History, Economics, AnthropologyThe “metrics” systemhttp://newsoffice.mit.edu/2014/book-studies-complex-social-questions-1201
Economist’s new book teaches how to conduct cause-and-effect studies on complex social questions.Mon, 01 Dec 2014 00:00:04 -0500Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2014/book-studies-complex-social-questions-1201<p>If you would like to produce good quantitative social-science research, try remembering these two words: “ceteris paribus.”</p>
<p>That’s Latin for “other things being equal.” And it’s a key principle when designing studies: Find two groups of people who, other things being equal, are distinguished by one key feature.</p>
<p>Consider health care. If you can find two otherwise equal groups of people who differ only in terms of health care coverage — one group has it, one doesn’t — then you may be able identify a causal relationship at work: What difference does it make when people get health insurance?</p>
<p>Without such a research strategy, scholars can be left staring at a tangle of potential causes and effects. Suppose you have one group of people with health insurance, and one without — but the insured people are wealthier. Are they better off financially because they have insurance, or do they have insurance because they’re better off financially? It may be hard to know. You need groups of equal wealth to solve the causation conundrum.</p>
<p>“People are constantly looking at the world around them and trying to learn from it, and that’s natural,” MIT economist Joshua Angrist says. “But it turns out to be very difficult to sort out cause and effect, because the world is complicated, with many things happening at once.”</p>
<p>Angrist, the Ford Professor of Economics, has long been one of the leading advocates of research that uses “ceteris paribus” principles. Now, along with Jorn-Steffen Pischke of the London School of Economics, Angrist has written a book on the subject for a general audience, “<a href="http://press.princeton.edu/titles/10363.html">Mastering ‘Metrics: The Path from Cause to Effect</a>,” published this month by Princeton University Press.</p>
<p>“Hopefully our book will find a place in the undergraduate curriculum,” Angrist says. “We also hope that many nonstudents — interested observers who like to think about data and the light it sheds on our world — will find it useful.”</p>
<p><strong>The hunt for randomization</strong></p>
<p>Much of Angrist’s work has been an attempt to replicate the clean structure of randomized controlled trials, as seen in research laboratories. “The best way to isolate cause and effect, and make sure you’ve only got one thing going on, is to do a randomized experiment,” Angrist notes.</p>
<p>But for logistical, monetary, or ethical reasons, social scientists conduct few long-term, large-scale experiments. As a substitute, they look for “natural experiments,” or “quasi-experiments,” where otherwise equal groups of people wind up in different circumstances because of policy changes, quirks of geography, or other such factors.</p>
<p>In their new book, Angrist and Pischke detail five methods of identifying causality in society (they call these methods the “furious five” — part of a Kung Fu motif in the text). The furious five of econometrics, they contend, are randomized trials; regression analysis; use of the “instrumental variables”; regression discontinuity designs; and the “differences in differences” approach.</p>
<p>Take randomization: Several years ago, the state of Oregon instituted a lottery system to fill out its allotment of slots for Medicaid treatment. This created “ceteris paribus” conditions: A pool of similar people applied for Medicaid, but only a random subset received it.</p>
<p>Thus researchers can study the difference Medicaid coverage makes. So far, it appears, Medicaid coverage leads people to get more medical care, and reduces the incidence of depression, but coverage has not produced changes in biomarkers such as blood pressure. Access to Medicaid, however, has reduced the financial burden on enrollees.</p>
<p>“The big problem in social science is that the relationship between ‘A’ and ‘B’ may be a misleading guide to the effect of ‘A’ on ‘B,’” Angrist says. “That isn’t a theorem that that’s always true. But a lot of what people believe about the world turns out to be incorrect or misleading.”</p>
<p><strong>The rest of the “furious five”</strong></p>
<p>As for the other methods Angrist and Pischke detail, a regression analysis charts the relationship between two phenomena, while another important econometrics tool, instrumental-variables, amounts to a kind of imperfect randomized trial. Does growing up in a larger family make you a poorer adult? Using quasi-experimental variations in family size — including randomly occurring twin births, and the fact that family size relates to the gender composition of a set of children — researchers have found there is at least no effect of family size on completed education. &nbsp;</p>
<p>Regression discontinuity designs compare people who are narrowly on opposite sides of, say, a fateful policy cutoff. For example, students who took the entrance test but just missed being accepted to prestigious “exam schools” in New York and Boston did about as well over the long run as students who barely made it into the exam schools. Here the “ceteris paribus” principle stems from the basic similarity of both groups’ performance on the entrance exams.</p>
<p>Finally, the differences-in-differences approach looks at the variation of different statistical trajectories. Do bank rescues help economies? During the Great Depression, the Atlanta-based district of the U.S. Federal Reserve instituted a policy of lending to troubled banks, while the Fed’s St. Louis-based district did not. These districts shared a border that split Mississippi — creating a natural experiment, since other policy conditions in the state were equal. Ultimately the Atlanta Fed’s bank-saving efforts, dating to 1930, improved its district’s economic trajectory, while the St. Louis Fed’s district saw no such change.</p>
<p><strong>Fun and failure</strong></p>
<p>Angrist and Pischke are not alone in advocating these methods, which have gained popularity thanks to many scholars including the economists Orley Ashenfelter, David Card, Lawrence Katz, and Alan Krueger. Moreover, Angrist emphasizes, the best work of this type combines methodological sophistication and hard-earned knowledge of particular subject s.</p>
<p>“A PhD student who wants to be successful in our profession as a research economist has to master one of our fields, like labor economics, health economics, or development economics,” says Angrist, himself a labor economist. On the other hand, less specialized readers “should be able to understand our book, developing, we hope, a sense of how to think clearly about data and statistical relationships.”</p>
<p>Even sophisticated research may not produce airtight results. The book discusses a published study Angrist and a colleague conducted on the relationship between compulsory schooling and earnings. Over time, other researchers concluded their findings stemmed from varying regional economic trends in the U.S. states being sampled, not a strict causal link between the two phenomena.</p>
<p>“I think that’s a great lesson for graduate students and undergraduates,” Angrist reflects. “There’s more failure than success in empirical work.”</p>
<p>Such struggles aside, he concludes, “We want the book to be fun. If it makes readers smile, that will be a big accomplishment. If we get them to think clearly about statistics and causal relationships, then it will be a success.”</p>
The cover of "Mastering ’Metrics: The Path from Cause to Effect" (Princeton University Press), by MIT economist Joshua Angrist (pictured) and Jörn-Steffen Pischke of the London School of EconomicsSHASS, Economics, Books and authors, FacultyTwo MIT seniors and an alumnus named Rhodes Scholarshttp://newsoffice.mit.edu/2014/three-mit-rhodes-scholars-1123
Elliot Akama-Garren ’15, Anisha Gururaj ’15, and Noam Angrist ’13 are among 32 winners nationwide.Sun, 23 Nov 2014 00:35:08 -0500Nora Delaney | Global Education and Career Developmenthttp://newsoffice.mit.edu/2014/three-mit-rhodes-scholars-1123<p>Three MIT nominees — seniors Elliot Akama-Garren and Anisha Gururaj, and alumnus Noam Angrist ’13 — are among the 32 American recipients selected this weekend as Rhodes Scholars. Each will pursue graduate studies next year at Oxford University.</p>
<p>This year’s three Rhodes Scholars from MIT tie the Institute’s 2009 record for the most recipients in a single year. Akama-Garren, Gururaj, and Angrist bring to 49 the number of MIT winners of the prestigious international scholarships since they were first awarded to Americans in 1904.</p>
<p><strong>Elliot Akama-Garren</strong></p>
<p>Elliot Akama-Garren, from Palo Alto,&nbsp;Calif., is an MIT senior majoring in biology. As a Rhodes Scholar, Akama-Garren plans to pursue an MSc in integrated immunology at Oxford before returning to the U.S. to pursue an MD-PhD degree. He hopes to pursue a career in academic medicine — specifically, studying the immune system to find improved treatments for a range of diseases.</p>
<p>Akama-Garren started conducting immunology research at Stanford University as a high school student, ultimately becoming second author on a research paper. During his time at MIT, Akama-Garren has continued work in this field, with research at the Harvard Stem Cell Institute, MIT’s Koch Institute for Integrative Cancer Research, and at Massachusetts General Hospital.&nbsp;In recognition of his work, Akama-Garren was honored with this year’s Thomas J. Bardos Award for Undergraduate Students, awarded by the American Association for Cancer Research.</p>
<p>Since his freshman year, Akama-Garren has been an undergraduate researcher in the laboratory of Tyler Jacks, the David H. Koch Professor of Biology and director of the Koch Institute, where he has studied the potential therapeutic effectiveness of T cells in suppressing lung cancer. This work has resulted in two research papers that are currently under review for publication.</p>
<p>Akama-Garren has served for the last three years as editor-in-chief of the MIT Undergraduate Research Journal. Outside of the laboratory, he is president and co-captain of MIT’s ice hockey team. As team president, Akama-Garren organized a fundraiser game with the Israeli national ice hockey team that attracted more than 800 fans.</p>
<p>“Elliot is a serious thinker who is interested in ideas rather than glory,” says Kim Benard, assistant director of distinguished fellowships in MIT Global Education and Career Development. “In addition to his exemplary academic record, Elliot has been a pivotal member of the MIT hockey team and a dedicated volunteer at Harvard Square Homeless Shelter. He exudes brilliance with compassion.”</p>
<p><strong>Anisha Gururaj</strong></p>
<p>A native of Chesterfield, Mo., Anisha Gururaj is a senior majoring in chemical-biological engineering. As a Rhodes Scholar, she plans to pursue two degrees from Oxford: an MSc in engineering science research, with a focus in bioengineering, and a master’s in public policy. Ultimately, she hopes to build a career developing affordable biomedical devices for use in both the developed and the developing world.</p>
<p>For the past two years, Gururaj has conducted research at MIT’s Little Devices Lab, where she has worked on individualized medical devices that users can assemble themselves. This past summer, she conducted work at the Universidad del Desarollo in Chile to investigate how diagnostic kits created by the Little Devices Lab can be used in rural settings.</p>
<p>Under the supervision of Michael Yaffe, the David H. Koch Professor of Biology and Biological Engineering at MIT, Gururaj co-founded a project to design a low-cost, nonelectric fluid warmer for military trauma victims.&nbsp;During her time at the Institute, Gururaj has also conducted research in the MIT laboratory of Robert Langer, the David H. Koch Institute Professor, and at the National University of Singapore through the Singapore-MIT Alliance for Research and Technology.</p>
<p>Gururaj’s interest in international development has also led her to projects beyond the development of medical devices:&nbsp;She has collaborated with Maiti Nepal, an organization that assists sex-trafficking victims, to expand Nepali girls’ access to K-12 education.</p>
<p>“Anisha Gururaj is an inspiration,” says Rebecca Saxe, an associate professor of cognitive neuroscience and co-chair of MIT’s Presidential Committee on Distinguished Scholarships. “Her accomplishments are pretty remarkable, but what stands out most is how deeply she is committed to translating her knowledge and expertise into practical products and benefits that will make life better for people — whether those people are soldiers on the battlefield, young at-risk women in Nepal, or people living in rural villages with less access to modern health care. She perfectly exemplifies MIT’s mission in the world.”</p>
<p><strong>Noam Angrist</strong></p>
<p>Noam Angrist graduated from MIT in 2013 with a bachelor’s degree in mathematics and economics. He has worked at the intersection of economics and policy, with the goal of reforming education and international aid. As a Rhodes Scholar, Angrist will pursue an MSc in evidence-based social intervention and policy evaluation at Oxford.</p>
<p>Angrist, who hails from Brookline, Mass., was named a Fulbright Scholar to Botswana in 2013. He is currently working in Botswana on educational reform, conducting research on educational outcomes and on successful interventions in public health. He is the co-founder and executive director of Young 1ove, a nonprofit that connects young Africans with life-saving information related to HIV and AIDS.</p>
<p>As an MIT undergraduate, Angrist carried out research related to the Affordable Care Act. He also served as a research analyst for the Jameel Poverty Action Lab under the supervision of Esther Duflo, the Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics. While at MIT, Angrist co-founded Amphibious Achievement, an afterschool enrichment program for urban youth that combines academics and aquatic athletics.</p>
<p>“Noam is a force for good in the world,” says John Ochsendorf, the Class of 1942 Professor of Building Technology and Civil and Environmental Engineering and co-chair of MIT’s Presidential Committee on Distinguished Scholarships. “We are delighted that the Rhodes Scholarship will provide him with the opportunity to continue his work at Oxford. Noam has already made numerous important contributions, and the Rhodes Scholarship will greatly amplify his impact.”</p>
Students, Undergraduate, Alumni/ae, Biology, Chemical engineering, Mathematics, Economics, School of Engineering, School of Science, SHASS, Awards, honors and fellowshipsMIT SHASS economist James Poterba awarded the Holland Medalhttp://newsoffice.mit.edu/2014/mit-shass-economist-james-poterba-awarded-holland-medal-1112
Medal honors outstanding contributions to public finance.Wed, 12 Nov 2014 12:02:01 -0500School of Humanities, Arts, and Social Scienceshttp://newsoffice.mit.edu/2014/mit-shass-economist-james-poterba-awarded-holland-medal-1112<p>MIT Economics Professor James M. Poterba has been chosen to receive the Daniel M. Holland Medal from the National Tax Association in honor of his outstanding contributions to the study and practice of public finance.<br />
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The medal will be presented Nov. 14 at the association’s 107th Annual Conference on Taxation, which will take place in Santa Fe, N.M.<br />
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The Mitsui Professor of Economics, Poterba is the first MIT faculty member to receive the Holland Medal, which was established in 1993 to honor Holland, a nearly 30-year MIT Sloan faculty member who was an expert on taxation and public finance. Holland served as president of National Tax Association in 1989 and edited the <em>National Tax Journal</em> from 1966 until his death in 1991.&nbsp;<br />
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"This award is especially meaningful because Dan Holland was my colleague and friend,” Poterba said.&nbsp;“He and I shared an interest in taxation and corporate finance, and with offices just one floor apart in E52, we had many opportunities to discuss current research.&nbsp;Dan was a wonderful role model, and I am deeply honored to receive this award which celebrates his memory."<br />
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Poterba, who joined the MIT faculty in 1983, teaches a graduate course on the economics of taxation.&nbsp;His recent work has emphasized the effect of taxation on the financial behavior of households, particularly their saving and portfolio decisions. He has been especially interested in analysing&nbsp;the impact of 401(k) plans and IRAs on the level and adequacy of retirement saving.</p>
<p>From 2006-2008, Poterba served as head of the MIT Department of Economics, and in 2009 was&nbsp;president of the National Tax Association, a nonpartisan, nonpolitical educational organization dedicated to fostering the study and discussion of complex and controversial issues in tax theory, practice, and policy, as well as other aspects of public finance. Nine of Poterba's PhD students have won the National Tax Association's award for the outstanding doctoral dissertation in government finance and taxation.</p>
<p>Since 2008, Poterba&nbsp;has also served as president of the National Bureau of Economic Research, a non-profit research organization with more than 1,300 affiliated economists. &nbsp;</p>
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<em>Story prepared by MIT SHASS Communications<br />
Editorial and Design Director: Emily Hiestand<br />
Senior Writer: Kathryn O'Neill</em><br />
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Jim PoterbaAwards, honors and fellowships, Faculty, Economics, SHASS, PolicyDresselhaus and Solow win Presidential Medal of Freedomhttp://newsoffice.mit.edu/2014/dresselhaus-solow-presidential-medal-freedom-1110
Two Institute Professors are among 19 new recipients of the nation’s highest civilian honor. Mon, 10 Nov 2014 22:48:46 -0500Steve Bradt | MIT News Officehttp://newsoffice.mit.edu/2014/dresselhaus-solow-presidential-medal-freedom-1110<p>Institute Professors Mildred Dresselhaus and Robert Solow are among 19 new winners of the Presidential Medal of Freedom, the nation’s highest civilian honor.</p>
<p>The honors were announced today by President Barack Obama. Dresselhaus and Solow, both of whom are Institute Professors Emeritus, will receive the awards at a White House ceremony on Nov. 24.</p>
<p>“I look forward to presenting these 19 bold, inspiring Americans with our nation’s highest civilian honor,” Obama said in a White House announcement.</p>
<p>The Presidential Medal of Freedom is presented to individuals who have made especially meritorious contributions to the security or national interests of the United States; to world peace; or to cultural or other significant public or private endeavors.</p>
<p>“From activists who fought for change to artists who explored the furthest reaches of our imagination; from scientists who kept America on the cutting edge to public servants who help write new chapters in our American story, these citizens have made extraordinary contributions to our country and the world,” Obama said.</p>
<p>"Millie Dresselhaus and Bob Solow have been recognized with extraordinary professional honors in their respective fields, including the rank of Institute Professor Emeritus, the highest distinction granted by the MIT faculty," MIT President L. Rafael Reif said. "But the Presidential Medal of Freedom is different: In receiving it, Millie and Bob demonstrate that their approach to scholarship — bold, rigorous, highly creative, and actively applied to the problems of the world — represents citizenship in the highest sense. We could not be more grateful for all they have given us, and the world, as scholars, teachers, colleagues, and friends."</p>
<p>The White House called Dresselhaus “one of the most prominent physicists, materials scientists, and electrical engineers of her generation. … She is best known for deepening our understanding of condensed matter systems and the atomic properties of carbon, which has contributed to major advances in electronics and materials research.”</p>
<p>“Robert Solow is one of the most widely respected economists of the past 60 years,” the White House said of the MIT economist, who received the Nobel Prize in economics in 1987. “His research in the 1950s, 1960s, and 1970s transformed the field, laying the groundwork for much of modern economics.&nbsp;He continues to influence policymakers, demonstrating how smart investments, especially in new technology, can build broad-based prosperity, and he continues to actively participate in contemporary debates about inequality and economic growth.”&nbsp;</p>
<p>Atmospheric chemist&nbsp;Mario Molina, an Institute Professor Emeritus&nbsp;who was on the faculty of the Department of Earth, Atmospheric and Planetary Sciences from 1989 to 2006 before moving to the University of California at San Diego, won the Presidential Medal of Freedom last year. The late Harold "Doc" Edgerton, then a professor of electrical engineering, won the honor in 1946 for his contributions to the American victory in World War II — specifically, for advances in night aerial photography that were crucial to the success of the Normandy invasion.</p>
<p>In addition to Dresselhaus and Solow, the other new Presidential Medal of Freedom recipients announced today are:</p>
<ul>
<li><strong>Alvin Ailey,</strong> choreographer and dancer</li>
<li><strong>Isabel Allende, </strong>novelist</li>
<li><strong>Tom Brokaw,</strong> journalist, newscaster, and author</li>
<li><strong>James Chaney, Andrew Goodman, and Michael Schwerner,&nbsp;</strong>civil rights activists in the “Freedom Summer” of 1964</li>
<li><strong>John Dingell,</strong> congressman from Michigan</li>
<li><strong>Ethel Kennedy,</strong> activist for social justice and human rights</li>
<li><strong>Suzan Harjo,</strong> writer, curator, and Native American activist</li>
<li><strong>Abner Mikva,</strong> public servant in all three branches of federal government</li>
<li><strong>Patsy Takemoto Mink,</strong> congresswoman from Hawaii</li>
<li><strong>Edward Roybal,</strong>&nbsp;congressman from California&nbsp;</li>
<li><strong>Charles Sifford,</strong> professional golfer</li>
<li><strong>Stephen Sondheim,</strong> theater composer and lyricist</li>
<li><strong>Meryl Streep,</strong> actress</li>
<li><strong>Marlo Thomas,</strong> actress, producer, author, and social activist&nbsp;</li>
<li><strong>Stevie Wonder,</strong> singer-songwriter</li>
</ul>
Mildred Dresselhaus and Robert SolowSchool of Science, School of Engineering, SHASS, Physics, Electrical Engineering & Computer Science (eecs), Economics, Faculty, National relations and service, Awards, honors and fellowships, Government, President ObamaA new look — and lights — for historic MIT Sloan buildinghttp://newsoffice.mit.edu/2014/new-look-and-lights-historic-mit-sloan-building-1021
MIT Sloan’s original building, E52, will re-open in January 2016 and feature a light installation by artist Leo Villareal.Tue, 21 Oct 2014 16:02:01 -0400Amy MacMillan Bankson | MIT Sloan School of Managementhttp://newsoffice.mit.edu/2014/new-look-and-lights-historic-mit-sloan-building-1021<p>Building E52, known in the MIT tradition of numbering its buildings, has been undergoing major renovations for the past year, and is expected to <a href="http://capitalprojects.mit.edu/projects/sloan-building-e52" target="_blank">re-open in January 2016</a>, according to Cindy Hill, MIT Sloan’s director of capital projects.</p>
<p>Once renovations on Building E52 are complete, the familiar “50 Memorial Drive” etched in stone will remain the same at the Memorial Drive entrance,&nbsp;while the Shames Plaza entrance will be lit up with a sculpture created by artist <a href="http://villareal.net/" target="_blank">Leo Villareal</a>, who was recently awarded an MIT List Visual Arts Center <a href="http://listart.mit.edu/collections/percent-art" target="_blank">Percent-for-Art</a> commission to create a light installation for the historic building.</p>
<p>Villareal previously created "The Bay Lights" on the San Francisco Bay Bridge West Span. For E52, he plans to craft a light sculpture in the north vestibule that will feature a new, glass-enclosed entrance. The proposed work will include 240 hanging LED rods arranged from the ceiling in rows. Each of these rods will measure approximately 9 feet tall, and will consist of 72 individual LEDs. Villareal will create a software code so that the LEDS will cycle through a randomly generated series of combinations.</p>
<p>The original MIT Sloan building, built in 1938 as the site of the Lever Brothers Company headquarters, will also be radically updated on the inside.</p>
<p>“We are renovating a historic building, and it was art déco in its original form,” Hill says. “I think we’ll have some of that look going on when it’s done.”</p>
<p>She adds that the building’s exterior will be preserved; the facade will be repaired, cleaned, and given new windows. Although there will be interior style changes, the two main staircases and the elevators will remain in their original locations, but walls, floors, and ceilings will be new.</p>
<p>Building E62, featuring the Joan and William A. Porter Center for Management Education, already has a second-story bridge, which will connect to E52 once construction is complete. “It will be wonderful to start using that,” Hill says. “It will be easy to get from classes in E51 to E62.”</p>
<p>Like the adjoining E62 and E60 buildings, the systems will be energy-efficient, and MIT Sloan will again be seeking LEED certification, Hill explains.</p>
<p>Many MIT Sloan administrative offices and the MIT Department of Economics, which were previously in E52, have been temporarily moved to other campus locations during the construction. Some of these offices will move back once the building is ready. The former MIT Faculty Club space, which will be expanded and renovated as a campus conference center, will return to the sixth floor and will also encompass a seventh floor addition: a glass-encased rooftop. The center will be available to all members of the MIT community for meetings, events, banquets, and conferences. In total, nearly 20,000 square feet of space will be added to the 135,000-square-foot building.</p>
MIT Sloan Building E52Sloan School of Management, Campus buildings and architecture, Economics, Community, Architecture, Art, List Visual Arts CenterSaid and Done for October 2014http://newsoffice.mit.edu/2014/said-and-done-october-2014-1021
Digest of the MIT humanities, arts, and social sciences features a Nobel Prize, a new professorship in the Department of Linguistics and Philosophy, three new SHASS websites, and more.Tue, 21 Oct 2014 13:41:01 -0400Emily Hiestand | School of Humanities, Arts, and Social Scienceshttp://newsoffice.mit.edu/2014/said-and-done-october-2014-1021<p><em>Published monthly during the School terms, and once in the summer,&nbsp;</em>Said and Done<em>&nbsp;is a&nbsp;photo-rich digest from MIT's School of Humanities, Arts, and Social Sciences, integrating feature articles with news and&nbsp;research to give a distilled overview of the school's endeavors. For the complete online edition, visit&nbsp;<a href="http://bit.ly/1qss0XF" style="color: rgb(246, 37, 18); text-decoration: none;" target="_blank">Said and Done</a>. Highlights of the October&nbsp;2014 edition include:</em></p>
<p>ECONOMICS<br />
<strong>MIT SHASS alumnus Jean Tirole wins Nobel Prize in Economic Sciences</strong><br />
Jean Tirole PhD '81, a former MIT&nbsp;faculty member and a current annual visiting professor of economics at MIT, was awarded the 2014 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel&nbsp;for his&nbsp;<a href="http://on.cfr.org/1w4BxK6" style="color: rgb(153, 0, 0);" target="_blank">analysis</a>&nbsp;of market power and how governments can better regulate industries from banking to telecommunications.<br />
<a href="http://bit.ly/1sLnOFS" target="_blank">NobelPrize.org</a><span style="line-height:1.6">,&nbsp;</span><a href="http://bit.ly/1wtQQdr" style="line-height: 1.6; color: rgb(153, 0, 0);" target="_blank">MIT News</a><span style="line-height:1.6">,&nbsp;</span><a href="http://bloom.bg/1rra7Yu" style="line-height: 1.6; color: rgb(153, 0, 0);" target="_blank">Bloomberg</a><span style="line-height:1.6">, </span><a href="http://nyti.ms/1z5QMGw" style="line-height: 1.6; color: rgb(153, 0, 0);" target="_blank">The New York Times</a><span style="line-height:1.6">, </span><a href="http://bit.ly/1sDdm5G" style="line-height: 1.6; color: rgb(153, 0, 0);" target="_blank">The Boston Globe</a><span style="line-height:1.6">&nbsp;</span><br />
<a href="http://bit.ly/1qlyK9R" style="line-height: 1.6; color: rgb(153, 0, 0);" target="_blank">Recording of Tirole upon receiving the Nobel Prize</a><br />
<br />
<br />
LINGUISTICS<br />
<strong>Danny Fox named Anshen-Chomsky Professor of Language and Thought</strong><br />
“Danny Fox belongs to the rare breed of researchers who not only discover remarkable new facts about language, but also has the vision to see what these discoveries are teaching us about the mind as a whole, about the structure of language as a part of the human mind, and about the internal workings of language itself,” said David Pesetsky, head of the MIT Department of Linguistics and Philosophy.&nbsp;“He is simultaneously a theoretician and an experimentalist, a brilliant linguist, and a profound cognitive scientist.”<br />
<a href="http://bit.ly/1w2dxaA" style="color: rgb(153, 0, 0);" target="_blank">Story</a><br />
<br />
<br />
POLITICAL SCIENCE<br />
<strong>Bateson wins APSA's Almond Award for best disseration in comparative politics&nbsp;</strong><br />
Assistant Professor Regina Bateson’s dissertation, “Order and Violence in Postwar Guatemala,” won the APSA’s Gabriel A. Almond Award, given annually to the best dissertation in the field of comparative politics.<br />
<a href="http://bit.ly/1D8B0t4" style="color: rgb(153, 0, 0);" target="_blank">Bateson webpage</a><br />
<br />
PHILOSOPHY<br />
<strong>Steve Yablo interviewed by Richard Marshall in&nbsp;</strong><em><strong>3:AM Magazine</strong></em></p>
<p><strong>3:AM:</strong>&nbsp;What made you become a philosopher?<br />
<strong>Stephen Yablo:</strong>&nbsp;Hmmmm. I guess it was Hebrew school. The teacher said that we must never judge God, since we don’t know a thing about him. I was in love at the time with Magilla Gorilla, a cartoon character. He struck me as a higher sort of being. This sounded nutty, I realized, and I kept it to myself. Then on hearing that nothing was known about God, I inferred that in particular it wasn’t known that he was not my loveable ape. I was told on raising this question in class that one thing was known after all; God was not Magilla. This confused me enough to start me down the road to philosophy.<br />
<a class="twt_avatar_tip" href="http://bit.ly/1sxyBFh" rel="nofollow" style="color: rgb(153, 0, 0);" target="_blank">Story</a>&nbsp;</p>
<p>RESEARCH&nbsp;<br />
<strong>All current SHASS research stories by the&nbsp;MIT News team&nbsp;</strong><br />
Peter Dizikes writes about MIT faculty&nbsp;research on&nbsp;time and&nbsp;spacetime;&nbsp;the&nbsp;effects of&nbsp;means-tested social insurance programs;&nbsp;learning from African technology;&nbsp;the postiive impact of workplace diversity on profit;&nbsp;and&nbsp;barriers to a U.S.-Iran nuclear treaty.<br />
<a href="http://bit.ly/1fBiTAn" style="line-height: 1.6; color: rgb(153, 0, 0);" target="_blank">Stories about MIT&nbsp;SHASS research</a></p>
<p>NEW MIT SHASS WEBSITES</p>
<p><strong>Global Studies &amp; Languages &nbsp;</strong><a href="http://bit.ly/1w7ledT" style="color: rgb(153, 0, 0); font-family: Verdana, Tahoma, Arial, Lucida, Helvetica, 'Bitstream Vera Sans', sans-serif; font-size: 12px; line-height: 16px;" target="_blank">Website</a><br />
<br />
<strong style="line-height:1.6">Literature at MIT &nbsp;&nbsp;</strong><a href="http://bit.ly/TuFYsV" style="color: rgb(153, 0, 0); font-family: Verdana, Tahoma, Arial, Lucida, Helvetica, 'Bitstream Vera Sans', sans-serif; font-size: 12px; line-height: 16px;" target="_blank">Website</a><br />
<br />
<strong style="line-height:1.6">The Humanities Flim Office &nbsp;&nbsp;</strong><a href="http://bit.ly/1o8sxD4" style="color: rgb(153, 0, 0); font-family: Verdana, Tahoma, Arial, Lucida, Helvetica, 'Bitstream Vera Sans', sans-serif; font-size: 12px; line-height: 16px;" target="_blank">Website</a><br />
<br />
MUSIC<br />
<strong>MIT launches a major new music series</strong><br />
The new concert series, MIT Sounding,&nbsp;will feature world premieres, reconstructed classics, and Grammy Award-winning musicians.<br />
<a href="http://bit.ly/1sDHGNH" style="color: rgb(153, 0, 0);" target="_blank">Story</a>&nbsp;</p>
<p>MUSIC<br />
<strong>Mark Harvey's Aardvark Jazz Orchestra releases new CD&nbsp;</strong><br />
Comprised of live performances recorded at MIT, Aardvark's 12th CD, "Impressions," is garnering enthusiastic reviews. Harvey is a lecturer in the MIT&nbsp;Music Program, and the esteemed director of the Aardvark Jazz Orchestra.<br />
<a href="http://bit.ly/1CpPOmN" style="color: rgb(153, 0, 0);" target="_blank">About + forthcoming performances</a>&nbsp; | &nbsp;<a href="http://bit.ly/1tYbfop" style="color: rgb(153, 0, 0);" target="_blank">Commentary at WBUR</a>&nbsp;&nbsp;| &nbsp;<a href="http://bit.ly/SmTvQ4" style="color: rgb(153, 0, 0);" target="_blank">Mark Harvey webpage</a><br />
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FORTHCOMING<br />
<strong>October 30 </strong>|<strong>&nbsp;Ultimate Truths&nbsp;</strong>|<strong>&nbsp;MIT SHASS&nbsp;</strong><strong>Communications Forum event&nbsp;</strong><br />
Four brilliant thinkers&nbsp;will explore the differences and similarities in the kinds of knowledge available through inquiry in the sciences and humanities, and the ways that knowledge is obtained. Panelists are the&nbsp;historian, novelist, and columnist&nbsp;James Carroll; philosopher/novelist&nbsp;Rebecca Goldstein; author/physicist&nbsp;Alan Lightman; and biologist&nbsp;Robert Weinberg.&nbsp;Seth Mnookin, associate director of the forum, will moderate.&nbsp;7-9pm, Room 32-123 (Stata Center)<br />
<a href="http://bit.ly/1vPqDGj" style="color: rgb(153, 0, 0);" target="_blank">Information</a><br />
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<strong>MIT Music &amp; Theater Arts fall events calendar </strong><br />
Fall events include musical performances by Eviyan, the Jupiter Quartet,&nbsp;the Mysore Brothers, Seth Josel, the Ellipsis Trio,&nbsp;Welsh baritone Jeremy Huw Williams, the MIT Symphony Orchestra, and others, and&nbsp;a theater production of&nbsp;<em>Philoctetes</em>&nbsp;by John Jesurun, the McArthur-winning contemporary author and director. &nbsp;<br />
<a class="twitter-timeline-link" dir="ltr" href="http://bit.ly/1p7R5FI" rel="nofollow" style="color: rgb(153, 0, 0);" target="_blank" title="http://bit.ly/1p7R5FI">MTA events calendar</a><br />
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MIT SHASS IN THE MEDIA<br />
<strong>Challenging technical privilege&nbsp;</strong>|<strong> How race and gender matter &nbsp;</strong><br />
Silent technical privilege&nbsp;occurs when those who "look the part," or conform to society's stereotype of what a tech-savvy, number-crunching programmer or engineer looks like, receive the benefit of the doubt or implicit endorsement in technical settings. At this interactive symposium a panel discussed how technical privilege, stereotype threat and other forms of implicit bias contribute to&nbsp;underrepresentation of various groups&nbsp;in tech fields. &nbsp;<br />
<a href="http://bit.ly/1p7EaFg" style="color: rgb(153, 0, 0);" target="_blank">Story at <em>The Boston Globe</em></a>&nbsp;| &nbsp;<a href="http://bit.ly/ZfJlMj" style="color: rgb(153, 0, 0);" target="_blank">Video of event</a>&nbsp; |&nbsp;<a href="http://bit.ly/1B8jqSY" style="color: rgb(153, 0, 0);" target="_blank">Event website</a>&nbsp;&nbsp;<br />
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<strong>Evolving culture of science engagement&nbsp;</strong>|<strong>&nbsp;David Kaiser&nbsp;</strong><br />
Article in the&nbsp;<em>Huffington Post</em>&nbsp;about the "Evolving Culture of Science Engagement" project at MIT, which recently released a detailed report.&nbsp;<br />
<a href="http://huff.to/1yG13sE" style="color: rgb(153, 0, 0);" target="_blank">Story at <em>The Huffington Post</em></a>&nbsp;&nbsp;| &nbsp;<a href="http://bit.ly/1thQnvT" style="color: rgb(153, 0, 0);" target="_blank">Interview + report</a>&nbsp;&nbsp;| &nbsp;<a href="http://www.cultureofscienceengagement.net/" style="color: rgb(153, 0, 0);" target="_blank">Culture of Science Engagement website</a><br />
<br />
<strong>Fact or Fiction: Video games are the future of education?</strong><br />
Few would argue that video games can do it all in terms of education, says Scot Osterweil, a research director in&nbsp;Massachusetts Institute of Technology's Comparative Media&nbsp;Studies program and creative director of the school's Education Arcade initiative to explore how games can be used to promote learning. &nbsp;<br />
<a href="http://bit.ly/1njWQWu" style="color: rgb(153, 0, 0);" target="_blank">Story at <em>Scientific American</em></a></p>
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<div>
<p>RESOURCES:</p>
<p><strong>MIT SHASS Bookshelf</strong><br />
<a href="http://bit.ly/PPa5ts" target="_blank">New knowledge,&nbsp;innovation,&nbsp;and insight</a><br />
<br />
<strong>TOUR de SHASS</strong><br />
<a href="http://bit.ly/17Zk5Ia" style="color: rgb(153, 0, 0);" target="_blank">Explore MIT's humanities, arts and social science fields</a><br />
<br />
<strong>The Power of the Humanities at MIT</strong><br />
Op-Ed by Deborah K. Fitzgerald,&nbsp;Kenan Sahin Dean<br />
MIT School of Humanities, Arts, and Social Sciences<em>&nbsp;</em><br />
<a href="http://shass.mit.edu/news/news-2014-power-humanities-mit-commentary-dean-deborah-fitzgerald" style="color: rgb(153, 0, 0);">More</a></p>
<p><strong>MIT SHASS social media</strong><br />
<a href="https://www.facebook.com/MIT.SHASS" target="_blank">Facebook</a> | <a href="https://twitter.com/mit_shass" target="_blank">Twitter</a><br />
&nbsp;&nbsp;</p>
</div>
</div>
Africa, Arts, Awards, honors and fellowships, Books and authors, Diversity, Economics, Faculty, Health care, Humanities, Literature, languages and writing, Linguistics, Comparative Media Studies/Writing, Music, Philosophy, Political science, Race and gender, Research, Security studies and military, Social sciences, SHASS, Global Studies and LanguagesAt the intersection of real estate and urban economicshttp://newsoffice.mit.edu/2014/intersection-real-estate-and-urban-economics-albert-saiz-1021
Albert Saiz leads research efforts looking at what&#039;s really going on in real estate and urban housing markets.Tue, 21 Oct 2014 11:53:01 -0400Alice McCarthy | MIT Industrial Liaison Programhttp://newsoffice.mit.edu/2014/intersection-real-estate-and-urban-economics-albert-saiz-1021<p>Albert Saiz uses big data to understand real estate dynamics. As a professor in the Department of Urban Studies and Planning and director of MIT’s Center for Real Estate, his work is at the confluence of urban policy and city-making and the factors that drive real estate markets. An urban economist and director of the MIT Urban Economics Lab, Saiz studies the industrial composition of cities with an eye toward understanding what makes cities successful. He also creates and studies incredibly-detailed information about housing markets and how urban growth impacts real estate markets.</p>
<p><strong>Immigration explains half of city growth</strong><br />
<br />
Saiz’s focus is primarily on housing markets, with a particular view on understanding the demographic influences impacting their growth. “Immigration explains 50 percent of the differences in growth between metropolitan areas in the United States,” he says. “If you want to understand real estate markets or housing markets, construction values, etc., you have to understand immigration and immigration trends.”</p>
<p>He also studies several other key drivers of city growth and demand for housing and real estate assets. These include areas of low taxation, high levels of an educated population, and more lifestyle-oriented influences. “As recently as 20 years ago, we tended to believe that people followed jobs,” Saiz explains. “It is still the case that productive areas are becoming more attractive for housing demand, but it is also true that jobs are following people. And people are moving more for lifestyle and amenities.” Today, Saiz’s students are more likely to indicate they want to work in a particular city than for a particular company. That means firms that want to attract young professionals have to locate in these more highly desirable areas.</p>
<p>Saiz studies how all of these influences interact and influence housing supply. How does the local production of real estate assets, specifically housing, react to demand shocks? To answer that key question, Saiz has identified two main factors: land values (including the complexity of the zoning and development approval process) and construction costs. After performing a survey of all metro areas in the United States, Saiz and colleagues were able to identify very specific areas that were more amenable to development and those that are not. Where development could be accomplished easily, i.e. in areas with accessible, buildable land and less restrictive zoning/approval requirements, the result was more housing and real estate construction without an upward push on housing values. In attractive areas with relatively inelastic housing supply, such as Boston, New York, and San Francisco, housing demand pushes housing prices and construction costs upward.</p>
<p><strong>Center for Real Estate</strong><br />
<br />
Since 1983, the Center for Real Estate (CRE) has partnered with companies and organizations in all areas of the global real estate industry. “The CRE is in the business of applying intelligence to real estate products,” Saiz explains. “Our research goes anywhere from land use policy, land taxation, understanding housing markets and urban growth, to finance, mortgages, securitization in the real estate sector, and global investments in real estate and global finance.” Today, the CRE includes nearly two dozen industry partners and friends. “Our industry partners are quite sophisticated, entrepreneurial firms that want to be engaged at a highly intelligent level in understanding real estate markets,” says Saiz. “They are committed to using IT and data to forecast and make intelligent, well-founded decisions where they can gain some competitive advantage by using these methods.”</p>
<p><strong>Big data for big decisions</strong><br />
<br />
The big data revolution is already changing parts of the real estate industry, including the mortgage industry and the marketing of homes and real estate. But Saiz believes things are still a bit “in process” when it comes to fully using big data approaches to better understand investment, volatility and taking a portfolio strategy. As recently as 20 years ago, real estate profits were to be made without having so much information. “We’ve reached a point of maturity in both capital markets and real estate markets where small advantages can make a real difference for successful players to be more successful,” Saiz explains. That is where MIT and CRE play a key role. “We bring the data driven approach, the analytical approach that we marry with our engineering and entrepreneurial spirit and apply to tangential problems our industry partners are interested in.”</p>
<p>One of Saiz’s particular strengths is the measurement of market features that are typically difficult to quantify. “I have come up with indexes to measure local regulations, zoning regulations, land availability, the quality of land, access to transport, etc. so that at this point we have huge data sets for most census blocks in the United States,” he says. He and his team are very skilled at using big data to forecast variables critical for real estate developers, investors, portfolio investors, and investors in mortgage markets.</p>
<p><strong>Industry partners</strong><br />
<br />
“At the CRE, we typically deal with enlightened entrepreneurs who understand we are in a very competitive world now,” says Saiz. Most partners look to the CRE because they are producing lots of data and want to understand it better — or they want help producing it. Other partners engage on more strategic levels to understand the big trends in markets and to strategize for ways to minimize the risks they are facing.</p>
<p>Some CRE partners lean more heavily on the educational aspect of the relationship. They take executive developmental classes, partner in research projects with the Center’s Master of Science in Real Estate Development students, or join the CRE network to gain access to more than 900 global CRE alumni. “Of course, our partnerships are a symmetrical two-way street and we really benefit from the partners,” adds Saiz. “It is in the DNA at MIT that we engage the industry and the world. Our duty as professors is to take knowledge from the world and bring it back. In that way, our partners give us the knowledge and we in turn give it back to them and the broader world.”</p>
Albert SaizReal estate, Urban studies and planning, Economics, Faculty, Profile, Housing, Center for Real Estate, Immigration, Jobs3 Questions: Jonathan Gruber on the cost of smokinghttp://newsoffice.mit.edu/2014/3-questions-jonathan-gruber-cost-smoking-1013
Leading health care economist weighs in on a proposed cost-benefit analysis of smoking. Mon, 13 Oct 2014 17:00:06 -0400Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2014/3-questions-jonathan-gruber-cost-smoking-1013<p><em>Earlier this year, the U.S. Food and Drug Administration (FDA) proposed new regulations for e-cigarettes, and in so doing developed a much-debated cost-benefit analysis of smoking — one that discounts the benefits of quitting smoking by 70 percent due to the loss of pleasure involved. MIT’s Jonathan Gruber, a high-profile health care economist, is among the skeptics of the new calculation: He has conducted research on smokers and is co-author of a new piece in the </em>Annals of Internal Medicine<em>, published this week, suggesting that the “lost pleasure” is smaller than the government is currently estimating. Gruber, the Ford Professor of Economics, discussed the issue with </em>MIT News<em> recently. </em></p>
<p><strong>Q.</strong> Cigarette labeling and smoking have been the subject of political debate for decades. What is new and surprising in these debates that have sprung up in 2014?</p>
<p><strong>A.</strong> The major issue at stake is the reach of the FDA in regulating self-damaging activities such as smoking. This is an important and controversial area.&nbsp;The FDA has, for the first time, included in its cost-benefit analysis of regulations the “lost pleasure” of those who stop smoking due to regulation. I think that this is inappropriate and a misreading of the evidence on how smoking decisions are made.</p>
<p><strong>Q.</strong> You have studied topics such as the adoption of smoking by teenagers and the question of whether or not consumers understand the risks associated with smoking, among other things. What is some of the most relevant evidence that should inform the discussion?</p>
<p><strong>A.</strong> I think there are two clear conclusions from past research in this area. First, those who initiate in their teenage years — as more than 75 percent of smokers do — do not understand the addictive nature of smoking. One study asked high school seniors smoking one pack or more per day whether they would be smoking in five years.&nbsp;Among those who said that they would be smoking, 72 percent were smoking; among those who said they would not, it was 74 percent.</p>
<p>Second, smokers generally have a “self control” problem: They would like to quit, but cannot do so. Data from a 2002 survey show that more than 9 out of 10 smokers agreed or strongly agreed with the statement, “If you had to do it over again, you would not have started smoking.” Further, 7 out of every 10 smokers reported that they wanted to quit smoking, and more than half of all smokers stopped smoking for at least one day with the intent of quitting permanently.&nbsp;Yet only 2.7 percent of smokers quit each year. My own research finds that the self-reported happiness of potential smokers rises when cigarette taxes are increased.</p>
<p><strong>Q.</strong> How should policymakers best interpret such facts, and assess the costs and benefits of smoking?</p>
<p><strong>A.</strong> Given this evidence, policymakers should not be applying the standard economics model [in which people are presumed to act rationally] to smoking policy, which would imply relatively little merit for features such as warning labels.&nbsp;Rather, it is important to consider alternative models that incorporate the type of evidence cited above.&nbsp;For example, my own research shows that if you treat all smokers as standard, rational, patient, forward-looking consumers, then we should probably tax cigarettes at below $1 per pack. But if you incorporate the self-control problems noted above — not even including the failures of teens to anticipate the future — the appropriate tax rises to $5 to $10 per pack.</p>
Economics, Health, Research, Policy, Health care, SHASS, 3 QuestionsAlumnus Jean Tirole wins Nobel Prize in economic scienceshttp://newsoffice.mit.edu/2014/jean-tirole-wins-nobel-prize-1013
Former faculty member lauded for framework for regulating dominant firms in imperfect markets.Mon, 13 Oct 2014 09:59:26 -0400Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2014/jean-tirole-wins-nobel-prize-1013<p>Jean Tirole PhD ’81, a scholar whose longstanding ties to MIT include service on the economics faculty from 1984 to 1991, has been awarded the 2014 Nobel Prize in economic sciences for his work on the behavior and regulation of powerful firms.</p>
<p>Research by Tirole, 61, now a professor of economics at the University of Toulouse in his native France, has highlighted the need for regulation to be tailored to individual industries, while creating a general framework for understanding the nuances of regulation across industries.</p>
<p>Tirole received his PhD in economics from MIT in 1981 under the supervision of Eric Maskin, a former MIT professor (now at Harvard University) who was himself a winner of the Nobel Prize in economic sciences in 2007.</p>
<p>Tirole remains an MIT faculty affiliate as the Annual Visiting Professor of Economics in MIT’s Department of Economics. He has co-authored papers with a number of members of the MIT economics faculty, including Olivier Blanchard, Jerry Hausman, Bengt Holmstrom, and Paul Joskow.&nbsp;Tirole and Holmstrom co-authored a 2011 book about liquidity in markets, “Inside and Outside Liquidity.”&nbsp;</p>
<p><strong>Focus on oligopoly</strong></p>
<p>Many of Tirole’s research advances have involved cases of oligopoly, where a few firms dominate a given industry, controlling the quantity and quality of goods being produced, as well as prices.</p>
<p>“From the mid-1980s and onwards, Jean Tirole has breathed new life into research on such market failures,” the Royal Swedish Academy of Science, which grants the Nobel awards, stated on Monday. “His analysis of firms with market power provides a unified theory with a strong bearing on central policy questions: how should the government deal with mergers or cartels, and how should it regulate monopolies?”</p>
<p>The academy emphasized that its award to Tirole also recognizes many of his findings on regulatory policy, some of which employ game theory and contract theory to describe the dynamics of regulating markets. For instance, regulators may know less than they wish about a firm’s costs and strategic options, so regulators can offer firms a series of options, in essence, regarding the regulatory contract the firm will enter into. It may also make sense, Tirole has concluded, for regulations to be drawn up in recognition of the fact that firms may hide information from regulators.</p>
<p>As the Nobel citation also noted, Tirole observed the potential for phenomena such as the “ratchet effect,” which relates to the timeframe of regulations: If a company does well in a short-term regulatory time frame, regulations may be ratcheted up, lowering the incentives for the firm to perform as well. Alternately, Tirole has suggested, regulators might impose lesser conditions and study their effects.</p>
<p>Tirole, who often worked with another colleague, the late French economist Jean-Jacques Laffont, "really changed the field of regulation," according to Glenn Ellison, the Gregory K. Palm Professor of Economics and an expert in industrial organization. By bringing game theory and other tools to bear on the field, Ellison notes, Tirole helped produce a whole series of systematically developed insights about regulation, which policymakers and regulators could examine and apply to relevant industries.</p>
<p><strong>Ongoing MIT connections</strong></p>
<p>Ellison, who took a course from Tirole in the late 1980s while working on his PhD at MIT, also describes the new Nobel laureate as a "wonderful teacher" with a knack for communicating the essence of a complicated problem.&nbsp;Indeed, Tirole now spends a week guest-teaching every year in classes at MIT, including a graduate course Ellison gives, among his other activities at the Institute.</p>
<p>"Jean has had, and continues to have, a strong presence in the MIT economics department," says Holmstrom, the Paul A. Samuelson Professor of Economics and Management at MIT. "We are all immensely proud of his achievements and happy about the Nobel Prize."</p>
<p>Holmstrom observes that Tirole "has a formidable ability to analyze complex problems," and that his "work ethic is impeccable and his willingness to give time and comments to other researchers is amazing. ... As a collaborator, he is frighteningly fast. He would be very intimidating if it wasn't for his total lack of pretension."</p>
<p>Tirole received engineering degrees from the Ecole Polytechnique and the Ecole des Ponts and Chausees in 1976 and 1978, respectively, and a mathematics degree from Universite Paris Dauphine. He received his doctorate from MIT in 1981.</p>
<p>The Nobel Prize in economics is formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, and has been given since 1969.&nbsp;Tirole is the 81st winner of a Nobel Prize with significant ties to MIT. Four professors have won the Nobel Prize in economic sciences while serving as members of the MIT faculty; including Tirole, 10 MIT alumni and five former MIT faculty have won the Nobel Prize in economic sciences.</p>
Jean Tirole PhD '81Alumni/ae, Economics, SHASS, Awards, honors and fellowshipsSHASS welcomes 10 new faculty membershttp://newsoffice.mit.edu/2014/shass-welcomes-10-new-faculty-members-1008
Wed, 08 Oct 2014 18:33:01 -0400School of Humanities, Arts, and Social Scienceshttp://newsoffice.mit.edu/2014/shass-welcomes-10-new-faculty-members-1008<p>The School of Humanities, Arts, and Social Sciences is very pleased to present the newest members of the MIT SHASS faculty. They come to MIT&nbsp;with diverse backgrounds and vast knowledge in their areas of research:&nbsp;empirics of matching markets; 19th- and 20th-century representations of childhood and the history of children's literature; international political economy and formal and quantitative methodology; the intersection of philosophy and linguistics; causes and consequences of ethnic conflict; intersection of science, technology, and urban politics in U.S. history; the meaning of natural language expressions; moral philosophy; and game theory, microeconomic theory, and political economy.</p>
<p>Please join us in welcoming these excellent scholars into the MIT&nbsp;community. &nbsp;</p>
<div>
<p><strong>Nikhil Agarwal,&nbsp;Economics</strong></p>
<p>Nikhil Agarwal joins MIT's Department of Economics faculty in the fall of 2014 as an assistant professor. He received his PhD from Harvard University and was a postdoc at the Cowles Foundation at Yale University.</p>
<p>He studies the empirics of matching markets, or markets where prices do not clear the market. The applications he studies include medical residency markets, kidney donation, and public school choice. His current research focuses on developing methods to analyze data from these markets in order to answer questions about the effects of design on outcomes. &nbsp;<br />
<a href="http://economics.mit.edu/faculty/agarwaln" style="color: rgb(153, 0, 0);" target="_blank">Profile at MIT SHASS Department of Economics</a><br />
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<strong>Charlotte Brathwaite,&nbsp;Music and Theater Arts</strong></p>
<p>Charlotte Brathwaite joins MIT as an assistant professor of theater arts. Prior to coming to MIT, she was a visiting professor of theater and dance at Amherst College. She holds a Bachelor of Arts from the Amsterdam School for the Arts in the Netherlands and a Master of Fine Arts in directing from the Yale School of Drama.</p>
<p>Brathwaite is co-founder of the Berlin-based performance group Naturaleza Humana. She has assistant-directed for Yale Repertory Theater, Lincoln Center, Yale Opera, Richard Foreman, Robert Wilson, Francesca Zambello, and Christian Rath. She has shadowed director Joel Zwick on set at Disney Studios in Los Angeles. This summer she assisted director Peter Sellars’s production of "A Midsummer Night's Dream" at the Stratford Festival in Canada. She is recipient of a Princess Grace Foundation George C. Wolfe Award and the Julian Milton Kaufman Prize for Directing Yale University.&nbsp;<br />
<a href="http://theaterarts.mit.edu/faculty/brathwaite.html" style="color: rgb(153, 0, 0);" target="_blank">Profile at MIT SHASS Music and Theater Arts Section</a></p>
<p><strong>Marah Gubar,&nbsp;Literature</strong></p>
<p>Marah Gubar joins the Literature at MIT's faculty in fall, 2014 as an associate professor. Previously, she was an associate professor of English at the University of Pittsburgh, where she directed the nationally recognized Children’s Literature Program. She earned her PhD in English from Princeton University and did her undergraduate work at the University of Michigan at Ann Arbor, where she received a BA in English and a BFA in musical theatre.&nbsp;<br />
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Gubar teaches and writes about children’s literature from a variety of periods, but she is especially interested in 19th- and 20th-century representations of childhood and the history of children’s theatre. Her book, "Artful Dodgers: Reconceiving the Golden Age of Children’s Literature," was published by Oxford University Press&nbsp;in 2009 and won the Children’s Literature Association’s Book Award. She has also received several teaching prizes, including the Association of Princeton Graduate Alumni Teaching Award and the Chancellor’s Distinguished Teaching Award — the highest teaching honor given to faculty at Pitt. &nbsp;<br />
<a href="http://lit.mit.edu/people/mgubar/" style="color: rgb(153, 0, 0);" target="_blank">Profile at MIT SHASS Literature at MIT</a><br />
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<strong>In Song Kim,&nbsp;Political Science</strong></p>
<p>In Song Kim joins the MIT faculty as an assistant professor of political science. He received his PhD from the Department of Politics at Princeton University, and was awarded the Harold W. Dodds Fellowship for 2012 to 2013 academic year.</p>
<p>His research interests include international political economy and formal and quantitative methodology. His dissertation examines firm-level political incentives to lobby for trade liberalization. Kim is also interested in “big data” analysis of international trade. He is developing methods for dimension reduction and visualization to investigate how the structure of international trade around the globe has evolved over time. &nbsp;<br />
<a href="http://web.mit.edu/polisci/people/faculty/in-song-kim.html" style="color: rgb(153, 0, 0);" target="_blank">Profile at MIT SHASS Department of Political Science</a><br />
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<strong>Justin Khoo,&nbsp;Linguistics and Philosophy</strong></p>
<p>Justin Khoo joins the MIT faculty as an assistant professor of philosophy. He earned his PhD from Yale in 2013, and he was a postdoc in MIT's Department of Philosophy last year. His research interests are in philosophy of language, philosophical logic, and metaphysics.<br />
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Khoo is currently working on topics at the border between philosophy and linguistics. He has papers on the meaning and conversational pragmatics of conditionals ("if ... then"), modals ("may," "must"), and their interactions. More broadly, he is interested in the nature of language and communication. &nbsp;<br />
<a href="http://web.mit.edu/philosophy/khoo.html" style="color: rgb(153, 0, 0);" target="_blank">Profile at MIT SHASS Department of Linguistics and Philosophy</a></p>
<p><strong>Evan Lieberman,&nbsp;Political Science</strong></p>
<p>Evan Lieberman joins MIT as the Total Professor of Political Science and Contemporary Africa. Previously, Lieberman was a member of the faculty at Princeton University for 12 years, and a Robert Wood Johnson Health Policy Scholar at Yale University. He received his PhD from the University of California at Berkeley and his BA from Princeton.</p>
<p>Lieberman’s research is concerned with understanding the causes and consequences of ethnic conflict, and the determinants of good governance and policy-making, particularly in sub-Saharan Africa. He also writes and teaches on research methods for comparative analysis. Lieberman is the author of two scholarly books, "Race and Regionalism in the Politics of Taxation" (Cambridge, 2003) and "Boundaries of Contagion: How Ethnic Politics Have Shaped Government Responses to AIDS" (Princeton, 2009), as well as numerous scholarly articles. He received the David Collier Mid-Career Achievement Award at the 2014 annual meeting of the American Political Science Association. &nbsp;<br />
<a href="http://web.mit.edu/polisci/people/faculty/evan-lieberman.html/" style="color: rgb(153, 0, 0);" target="_blank">Profile at MIT SHASS Department of Political Science</a><br />
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<strong>Jennifer Light,&nbsp;Program in Science, Technology, and Society</strong></p>
<p>Jennifer Light joins the MIT faculty as a professor in the Program in Science, Technology, and Society and as a professor in the Department of Urban Studies and Planning (by courtesy). Previously, Light was at Northwestern University, where she was a professor of communication, history, and sociology. She holds degrees from Harvard and the University of Cambridge.</p>
<p>Light is fascinated by technocratic thinking and its uses in programs of social reform and social control. Light has been a member of the Institute for Advanced Study and received the Catherine Bauer Wurster Prize from the Society for American City and Regional Planning History. Her latest book, "From Voice to Influence: Understanding Citizenship in a Digital Age," co-edited with Danielle Allen, is forthcoming from University of Chicago Press in the spring of 2015. &nbsp;<br />
<a href="http://web.mit.edu/sts/people/light.html" style="color: rgb(153, 0, 0);" target="_blank">Profile at MIT SHASS Program in Science, Technology and Society</a></p>
<p><strong>Roger Schwarzschild,&nbsp;Linguistics and Philosophy</strong></p>
<p>Roger Schwarzschild joins the MIT faculty in the fall of 2014 as a professor of linguistics. His work addresses the meaning of natural language expressions. His research foci include plurality, comparatives, measure phrases, and intonational focus. He has taught at Rutgers University, at the Hebrew University of Jerusalem, and at Bar-Ilan University.<br />
<a href="http://web.mit.edu/linguistics/people/faculty/schwarzschild/" style="color: rgb(153, 0, 0);" target="_blank">Profile at MIT SHASS Department of Linguistics and Philosophy</a><br />
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<strong>Kieran Setiya,&nbsp;Linguistics and Philosophy</strong></p>
<p>Kieran Setiya joins the MIT faculty as a professor of philosophy. He holds a PhD from Princeton University along with a BA in philosophy from the University of Cambridge; he taught previously at the University of Pittsburgh.</p>
<p>Setiya's primary interests are in moral philosophy and its intersections with metaphysics, epistemology, and the philosophy of mind. He is the author of two books, "Reasons without Rationalism" (Princeton University Press, 2007) and "Knowing Right From Wrong" (Oxford University Press, 2012). His current work is on the place of love in moral philosophy, the ethics of procreation, and the midlife crisis.<br />
<a href="http://www.ksetiya.net/" style="color: rgb(153, 0, 0);" target="_blank">Kieran Setiya&nbsp;website</a><br />
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<strong>Alex Wolitzky,&nbsp;Economics</strong></p>
<p>Alex Wolitzky joins the MIT faculty as an assistant professor of economics. Previously, he was an assistant professor of economics at Stanford University, and before that a postdoc at Microsoft Research. He earned his PhD in economics from MIT and did his undergraduate work at Harvard University, where he received a BA in economics and mathematics.</p>
<p>His main areas of research are game theory, microeconomic theory, and political economy. In game theory, Wolitzky is interested in robust behavior in games and in models of bargaining, repeated games, reputation-formation, and networks. In political economy, he is interested in models of conflict and institutions and their implications for economic outcomes. Wolitzky's current research projects include a model for comparing centralized and decentralized enforcement of social norms, and a model of optimal taxation and redistribution under the threat of political reform. His research has been published in journals including&nbsp;<em>Econometrica,</em>&nbsp;<em>American Economic Review,</em> and&nbsp;<em>Review of Economic Studies.</em><br />
<a href="http://economics.mit.edu/faculty/wolitzky" style="color: rgb(153, 0, 0);" target="_blank">Profile at MIT SHASS Department of Economics</a></p>
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New SHASS facultyFaculty, SHASS, Economics, Linguistics, Philosophy, Technology and society, Political science, Literature, languages and writing, Music, TheaterJuma receives Lifetime Africa Achievement Prize http://newsoffice.mit.edu/2014/juma-receives-lifetime-africa-achievement-prize-1008
Wed, 08 Oct 2014 11:57:01 -0400Center for International Studieshttp://newsoffice.mit.edu/2014/juma-receives-lifetime-africa-achievement-prize-1008<p>Calestous Juma, the Dr. Martin Luther King, Jr. Visiting Professor at MIT, received a Lifetime Africa Achievement Prize (LAAP) for his leadership in socioeconomic development in Africa. The award will be presented to Juma in Nigeria on Oct. 10 by the <a href="http://mefafrica.org/" target="_blank">Millennium Excellence Foundation</a>.</p>
<p>Juma, a visiting professor at the MIT Department of Urban Studies and a research affiliate of the MIT Center for International Studies, is among 16 recipients of this year's esteemed award. The Millennium Excellence Foundation noted that the nominations were "unprecedented as the laureates met the mark of excellence of distinction never seen in the continent in several decades."</p>
<p>African heads of state, leaders of industry across the continent, academicians, the diplomatic corps, and a host of politicians will join in to celebrate this year's laureates.</p>
<p>The LAAP laureates will also participate in an economic forum to discuss issues rising from food security and sustainability to the scourge of Ebola in Africa. The outcomes of the discussions by the laureates will be communicated to African leaders and the general public.</p>
<p>Every two years, members of the Board of Governors of the Millennium Excellence Foundation nominate those who deserve recognition of merit and leadership within critical areas of socioeconomic development in Africa, and of championing and positively impacting the lives of Africans.</p>
<p>For more information on the 2014 LAAP laureates, visit the <a href="http://mefafrica.org/laap/2014-laap-laureates/" target="_blank">Millennium Excellence Foundation's laureates page</a>.&nbsp;</p>
Calestous JumaAwards, honors and fellowships, Faculty, Africa, International development, Urban studies and planning, Economics, Development, Center for International Studies, Technology and society, School of Architecture + PlanningStudy: Workplace diversity can help the bottom linehttp://newsoffice.mit.edu/2014/workplace-diversity-can-help-bottom-line-1007
MIT economist scrutinizes firm data suggesting diverse offices function more effectively.Tue, 07 Oct 2014 00:00:01 -0400Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2014/workplace-diversity-can-help-bottom-line-1007<p>Gender diversity in the workplace helps firms be more productive, according to a new study co-authored by an MIT researcher — but it may also reduce satisfaction among employees.</p>
<p>“Having a more diverse set of employees means you have a more diverse set of skills,” says Sara Ellison, an MIT economist, which “could result in an office that functions better.”</p>
<p>At the same time, individual employees may prefer less diverse settings. The study, analyzing a large white-collar U.S. firm, examined how much “social capital” offices build up in the form of things like cooperation, trust, and enjoyment of the workplace.</p>
<p>“The more homogeneous offices have higher levels of social capital,” Ellison observes. “But the interesting twist is that … higher levels of social capital are not important enough to cause those offices to perform better. The employees might be happier, they might be more comfortable, and these might be cooperative places, but they seem to perform less well.”</p>
<p><strong>More diversity, more revenue?</strong></p>
<p>The paper summarizing the study’s results, “Diversity, Social Goods Provision, and Performance in the Firm,” was recently published in the <em>Journal of Economics and Management Strategy</em>. The authors are Ellison, a senior lecturer in MIT’s Department of Economics, and Wallace P. Mullin, an economist at George Washington University.</p>
<p>The study used eight years of revenue data and survey results, covering 1995 to 2002, from a professional-services firm with more than 60 offices in the United States and abroad. The data included some all-male and all-female offices — both of which are unusual, the researchers note — in addition to mixed-gender offices. The survey data allowed Ellison and Mullin to study the employees’ ratings of office satisfaction, cooperation, and morale, not just one generalized measure of workplace happiness.</p>
<p>Among other results, the economists found that shifting from an all-male or all-female office to one split evenly along gender lines could increase revenue by roughly 41 percent. To see how this could happen, Ellison suggests an analogy with a baseball team.</p>
<p>“A baseball team entirely composed of catchers could have high <em>esprit de corps</em>,” Ellison says, noting that a band of catchers could share experiences, equipment, or tips for handling knuckleballs. “But it would not perform very well on the field.”</p>
<p>Similarly, greater social diversity implies a greater spread of experience, which could add to the collective knowledge of a group of office workers and make the unit perform more effectively.</p>
<p>Another wrinkle Ellison and Mullin found is that just the perception that firms are diverse was sufficient to produce satisfaction among employees — but this perception did not necessarily occur in the places where more extensive gender diversity accompanied better bottom-line results.</p>
<p>“In offices where people thought the firm was accepting of diversity, they were happier and more cooperative,” Ellison says. “But that didn’t translate into any effect on office performance. People may like the idea of a diverse workplace more than they like actual diversity in the workplace.”</p>
<p>Ellison acknowledges that in focusing on a single firm that was willing to provide data, the study was necessarily limited in scope, and says she would welcome further research. Management studies on social capital, she says, do not necessarily link the matter to objective financial results; economics studies of social capital have generally focused on issues such as public finance or even soldier behavior, and not job issues.</p>
<p>“There have been a number of studies looking at things like diversity and performance, but they don’t always use the [bottom-line] measures of performance that economists might prefer,” Ellison says. At the same time, she adds, “Highlighting the workplace setting, as a place for economists to study social capital, is also useful.”</p>
<p>The work was funded in part by the National Science Foundation.</p>
Research, SHASS, Economics, Diversity, Women, Work and family lifeSaid and Done for September 2014 http://newsoffice.mit.edu/2014/said-and-done-september-2014-0930
Digest of the MIT humanities, arts, and social sciencesTue, 30 Sep 2014 18:01:02 -0400Emily Hiestand | School of Humanities, Arts, and Social Scienceshttp://newsoffice.mit.edu/2014/said-and-done-september-2014-0930<p><em>Published monthly during the School terms, and once in the summer,&nbsp;</em>Said and Done<em>&nbsp;is a&nbsp;photo-rich digest from MIT's School of Humanities, Arts, and Social Sciences, integrating feature articles with news and&nbsp;research to give a distilled overview of the school's endeavors. For the complete online edition, visit&nbsp;<a href="http://bit.ly/Xc0pBJ" style="color: rgb(246, 37, 18); text-decoration: none;" target="_blank">Said and Done</a>. Highlights of the September 2014 edition include:</em><br />
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<p>LINGUISTICS&nbsp;<br />
<strong>Steriade elected a Fellow of the Linguistic Society of America</strong><br />
The honor recognizes a lifetime of accomplishment and intellectual leadership. MIT&nbsp;Professor of Linguistics&nbsp;Donca Steriade is the fifth member of the MIT faculty to be named an LSA Fellow, joining her colleagues&nbsp;Irene Heim&nbsp;and&nbsp;David Pesetsky,&nbsp;and Institute Professors emeritus&nbsp;Morris Halle&nbsp;and&nbsp;Noam Chomsky.&nbsp;Of the&nbsp;110 LSA Fellows&nbsp;named since the honor was initiated in 2006, 30 — slightly more than a quarter — are MIT Linguistics&nbsp;PhDs.&nbsp;<br />
<a href="http://bit.ly/1qSA8Vs" target="_blank">Announcement</a>&nbsp;| <a href="http://bit.ly/1qSAY4u" target="_blank">MIT&nbsp;News Archive: Steriade and Morris Halle</a><br />
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<p>HISTORY<br />
<strong>Wilder receives the 2014 Michael Harrington Book Award</strong><br />
The American Political Science Association awarded MIT Professor of History Craig Steven Wilder the 2014 Michael Harrington Award, given for&nbsp;an outstanding book that demonstrates how scholarship can be used in the struggle for a better world.&nbsp;<br />
<a href="http://bit.ly/1nUWbGb" target="_blank">About the Award</a>&nbsp;|&nbsp;<a href="http://bit.ly/12laH0k" target="_blank">Wilder webpage</a><br />
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<p>LITERATURE&nbsp;<br />
<strong>Why study medieval literature at MIT? Reason #1: T</strong><strong>ime Travel</strong><br />
In this 3-minute video, Arthur Bahr, MIT Associate Professor of Literature, transports viewers into an earlier version of our world, recites Old English, and identifies sources that inspired Tolkein.&nbsp;<br />
<a href="http://bit.ly/1mWHOoD" target="_blank">Video</a><br />
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<p>HISTORY + INTERNATIONAL POLITICS<br />
<strong>The history man&nbsp;</strong>|&nbsp;<strong>Francis Gavin&nbsp;</strong><br />
Nuclear security expert Francis Gavin brings the lens of history to the study of international politics.&nbsp;<br />
<a href="http://bit.ly/UZuiV8" target="_blank">Story by Peter Dizikes,&nbsp;MIT News</a><br />
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<p>NEW MIT SHASS PUBLICATIONS&nbsp;<br />
<strong>Bookshelf&nbsp;</strong><br />
"#!" (pronounced "shebang"),&nbsp;by Nick Montfort<strong> </strong>(Counterpath, 2014); "Aboutness," by Stephen Yablo (Princeton University Press, 2014); "Varieties of Liberalization and the New Politics of Social Solidarity," by&nbsp;Kathleen Thelen (Cambridge University Press, 2014)&nbsp;<br />
<a href="http://bit.ly/PPa5ts" style="line-height: 1.6; color: rgb(246, 37, 18); text-decoration: none;" target="_blank">Take a look</a><br />
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<p>PHILOSOPHY&nbsp;<br />
<strong>Likely the funniest hour you will ever spend listening to a discussion on&nbsp;normative philosophy</strong><br />
MIT SHASS Associate Professor of Philosophy Caspar Hare&nbsp;on "Ask the Expert"&nbsp;<br />
<a href="http://ow.ly/BhIgV" target="_blank">Listen</a><br />
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<p>POLITICAL SCIENCE | INTERNATIONAL TRADE<br />
<strong>Bringing big data to bear on international trade</strong>&nbsp;|<strong>&nbsp;In Song Kim&nbsp;</strong><br />
MIT Assistant Professor of Political Science Kim finds that the way firms lobby government on trade policy — pushing for more protectionism or more liberalization — depends on how unique their products are.<br />
<a href="http://bit.ly/1wjO7nA" target="_blank">Story by Eric Smalley</a><br />
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<p>LITERATURE&nbsp;<br />
<strong>Inspired readings&nbsp;</strong>|<strong>&nbsp;Arthur Bahr</strong><br />
MIT Professor of Literature Bahr makes medieval literature come alive.&nbsp;<br />
<a href="http://bit.ly/1oLkwNz" target="_blank">Story by Peter Dizikes,&nbsp;MIT</a><a href="http://bit.ly/1oLkwNz" target="_blank">&nbsp;News</a></p>
<p>HISTORY OF SCIENCE + PHYSICS<br />
<strong>Is time travel possible? What shape is the universe? What's the deal with wormholes? </strong><br />
MIT historian of science and physicist David Kaiser anchors the inaugural "Ask Me Anything" column for&nbsp;<em>Hippo Reads</em>, an academia-centered online magazine.</p>
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<div><a href="http://bit.ly/1lT7Yte" target="_blank">Column at Hippo Reads</a>&nbsp;+&nbsp;<a href="http://bit.ly/1xSiwhk" target="_blank">Commentary by Wade Roush at KSJ@MIT blog</a><br />
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<strong>Forthcoming&nbsp;MIT Music &amp; Theater Arts Events</strong><br />
Fall events include musical performances by Eviyan, the Jupiter Quartet,&nbsp;the Mysore Brothers, Seth Josel, the Ellipsis Trio,&nbsp;Welsh baritone Jeremy Huw Williams, the MIT Symphony Orchestra, and others, plus a theater production of "Philoctetes" by John Jesurun, the McArthur-winning contemporary author and director. &nbsp;</div>
<p><a dir="ltr" href="http://bit.ly/1p7R5FI" rel="nofollow" target="_blank" title="http://bit.ly/1p7R5FI">Complete MTA events calendar</a><br />
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<p>ECONOMICS&nbsp;<br />
<strong>Making the case for Keynes&nbsp;</strong>|<strong>&nbsp;Peter Temin&nbsp;</strong><br />
Temin's new book explains how the ideas of John Maynard Keynes relate to today's global economy, and&nbsp;makes the case that Keynesian deficit spending by governments is necessary to reignite the levels of growth that Europe and the world had come to expect prior to the economic downturn of 2008.<br />
<a href="http://bit.ly/1tZO1j3" target="_blank">Story by Peter Dizikes,&nbsp;MIT News</a><br />
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<p>HISTORY + ECONOMICS&nbsp;<br />
<strong>Tech Lessons from the Dark Ages</strong><br />
The so-called "Dark Ages" (476-1000 A.D)&nbsp;generated great technological advances. MIT historian&nbsp;Anne McCants explains. &nbsp;<br />
<a href="http://onforb.es/1Cg0l4Q" target="_blank">Article in Forbes</a><br />
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<p>POLITICAL SCIENCE&nbsp;<br />
<strong>Strategy, Doctrine, Organizing Principle</strong><br />
MIT&nbsp;Professor of Political Science Barry Posen and&nbsp;Andrew Ross of the Naval War College capture the debate on U.S. intervention in times of crisis&nbsp;in a 50-page article in&nbsp;<em>International Security</em>, the most prestigious outlet in the field for rigorous analysis.<br />
<a href="http://huff.to/1yd4hnq" target="_blank">Story at The Huffington Post</a><br />
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<p>SHASS ARTISTS IN RESIDENCE<br />
<strong>Coco Fusco and Marjorie Liu</strong><br />
A New York-based interdisciplinary artist and writer,&nbsp;Fusco will serve as a visiting associate professor in Comparative Media Studies/Writing.&nbsp;Marjorie Liu, an attorney and bestselling author of 17 novels,&nbsp;will teach the "Genre Writing Workshop" in Comparative Media Studies/Writing. &nbsp;<br />
<a href="http://bit.ly/1s1sw5e" target="_blank">More + brief biographies at CMS/Website</a></p>
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<p><strong>The Listening Room&nbsp;</strong><br />
<a href="http://bit.ly/PMgAS8" style="color: rgb(246, 37, 18); text-decoration: none;" target="_blank">MIT's finest music online</a></p>
<p><strong>TOUR de SHASS online</strong><br />
<a href="http://bit.ly/17Zk5Ia" style="color: rgb(246, 37, 18); text-decoration: none;" target="_blank">Explore MIT's humanities, arts, and social science fields</a></p>
<p><strong>MIT SHASS social media</strong><br />
<a href="http://on.fb.me/YcyAs1" target="_blank">Facebook</a>&nbsp; | &nbsp;<a href="http://twitter.com/mit_shass" target="_blank">Twitter</a></p>
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Arts, Awards, honors and fellowships, Economics, Faculty, History, Humanities, Center for International Studies, Literature, languages and writing, Linguistics, Music, Philosophy, Political science, Research, Books and authors, Social sciences, SHASS3 Questions: Calestous Juma on African developmenthttp://newsoffice.mit.edu/2014/economic-growth-in-africa-symposium-0923
MIT event spotlights new approaches to economic growth on the continent.Tue, 23 Sep 2014 00:00:00 -0400Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2014/economic-growth-in-africa-symposium-0923<p><em>How can Africa find new ways to spark economic growth? That is the focus of a wide-ranging public symposium hosted by the Center for International Studies as part of its Starr Forum event series. The event will be held on Wednesday, Sept. 24, from 3:00 to 4:30 p.m. in the Whitehead Institute’s McGovern Auditorium, and is organized in collaboration with the MIT Africa Interest Group. </em>MIT News<em> discussed the issue with Calestous Juma, the event’s moderator. Juma is the Martin Luther King Jr. Visiting Professor of Urban Studies and Planning at MIT, and professor of the practice of international development at the Harvard Kennedy School.</em></p>
<p><strong>Q. </strong>You have worked with the African Union as a high-level advisor to develop its new 10-year Science, Technology and Innovation Strategy for Africa, which is a focal point of tomorrow’s Starr Forum symposium. What are some of the distinctive features of this roadmap, regarding the contemporary challenges of growth across the continent?</p>
<p><strong>A. </strong>The key distinctive feature of the strategy is the recognition that Africa cannot sustain economic growth and promote prosperity without significant investments in technological innovation. It a departure from traditional growth strategies that focus on raw material exports. This is a bold attempt to reposition Africa as a player in the global knowledge economy. It emphasizes the strategic role of technological innovation in addressing critical challenges such as meeting human needs (such as food and health), improving international competitiveness through trade in manufactured goods, and protecting the environment.</p>
<p>To address these challenges, the African Union focuses on three key areas. The first is to build infrastructure — mainly energy, transportation, water and sanitation, irrigation, and telecommunication. Poor infrastructure is a key obstacle to Africa’s economic development and affects activities ranging from agriculture to health and scientific research.&nbsp;</p>
<p>Second, Africa will need to upgrade its technical competence and create the skills needed to respond to emerging economic and environmental challenges. This will be done through improving science, technology, engineering, and math education.&nbsp;</p>
<p>Finally, the strategy outlines measures for promoting technology-based entrepreneurship as the most efficient mechanism for translating technological ideas into goods and services for economic transformation. It underscores the critical role that high-level leaders, especially presidents and prime ministers, can play in fostering interactions among key actors such as government, academia, and business in promoting innovation.&nbsp;</p>
<p><strong>Q. </strong>A variety of countries in Africa have new initiatives to build larger university infrastructures. What are some of the crucial factors in making these efforts successful — and can scientists and technologists use this process to build new bridges to political leaders in Africa?&nbsp;</p>
<p><strong>A. </strong>The first major step in building the technical competence needed to propel African economies is to recognize legacy policies where universities predominantly teach but do undertake much research. National institutes, on the other hand, carry out research but have limited teaching functions. One possible way to solve this problem is to create a new species of universities that combine research, teaching, and entrepreneurial activities under one roof.&nbsp;</p>
<p>A greater degree of institutional innovation will be needed to align higher technical training with development objectives. This will involve reforms in curriculum, pedagogy, and location of universities to enable them to link more directly with the productive sector. Creating new technology-based universities will complement existing universities that have played an important role in building state institutions. What is needed today is to foster innovation and entrepreneurship.&nbsp;</p>
<p>The reforms needed to reposition higher education institutions will require broad dialogue between government, academia, and the private sector. Governments will need to create mechanisms such as national science and technology academies, as well as offices of science advisors to heads of state. Issues for which governments need urgent advice include the long-term implications of the advent of online education.</p>
<p><strong>Q. </strong>We face a variety of challenges when it comes to sustainability, whether relating to food security or climate change, land use, and other issues. In what ways does Africa have novel opportunities to merge innovation and sustainability?&nbsp;</p>
<p><strong>A. </strong>One of the main advantages of being a latecomer is the ability to harness new technologies that have a smaller ecological footprint than older vintages. For example, Africa’s ecological footprint would be much larger if it met its current communication needs using landlines instead of mobile connectivity. This logic of technological leapfrogging has yet to be pursued as policy strategy to promote sustainable development.</p>
<p>There are a number of emerging candidate technologies that help Africa reduce its ecological impact. Transgenic industrial crops such as cotton that have been engineered to resist pests have been demonstrated to reduce the use of harmful pesticides. This technology has been commercially adopted by only three African countries: South Africa, Burkina Faso, and Sudan. Other technologies that could have similar ecological benefits include the use of polymers for the slow release of fertilizers and pesticides.&nbsp;</p>
<p>Many of these transformational technologies also disrupt traditional social arrangements, and are therefore often associated with public controversies. Promoting ecologically sound development strategies will therefore need to take into account an improved assessment and management of technological risks. Africa has the opportunity to start from scratch by leapfrogging the legacy technologies that the industrialized nations are now burdened with. Mobile phones represent a powerful metaphor of how to think about the ecological function of technological leapfrogging in Africa.</p>
Calestous JumaSpecial events and guest speakers, School of Architecture + Planning, SHASS, Center for International Studies, Africa, International development, 3 Questions, Urban studies and planning, Economics, Development, Technology and societyMaking the case for Keyneshttp://newsoffice.mit.edu/2014/book-keynes-global-economy-0916
Peter Temin’s new book explains how John Maynard Keynes’ ideas relate to today’s global economy.Tue, 16 Sep 2014 00:00:03 -0400Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2014/book-keynes-global-economy-0916<p>In 1919, when the victors of World War I were concluding their settlement against Germany — in the form of the Treaty of Versailles — one of the leading British representatives at the negotiations angrily resigned his position, believing the debt imposed on the losers would be too harsh. The official, John Maynard Keynes, argued that because Britain had benefitted from export-driven growth, forcing the Germans to spend their money paying back debt rather than buying British products would be counterproductive for everyone, and slow global growth.</p>
<p>Keynes’ argument, outlined in his popular 1919 book, “The Economic Consequences of the Peace,” proved prescient. But Keynes is not primarily regarded as a theorist of international economics: His most influential work, “The General Theory of Employment, Interest, and Money,” published in 1936, uses the framework of a single country with a closed economy. From that model, Keynes arrived at his famous conclusion that government spending can reduce unemployment by boosting aggregate demand.</p>
<p>But in reality, says Peter Temin, an MIT economic historian, Keynes’ conclusions about demand and employment were long intertwined with his examination of international trade; Keynes was thinking globally, even when modeling locally.</p>
<p>“Keynes was interested in the world economy, not just in a single national economy,” Temin says. Now he is co-author of a new book on the subject, “Keynes: Useful Economics for the World Economy,” written with David Vines, a professor of economics at Oxford University, published this month by MIT Press.</p>
<p>In their book, Temin and Vines make the case that Keynesian deficit spending by governments is necessary to reignite the levels of growth that Europe and the world had come to expect prior to the economic downturn of 2008. But in a historical reversal, they believe that today’s Germany is being unduly harsh toward the debtor states of Europe, forcing other countries to pay off debts made worse by the 2008 crash — and, in turn, preventing them from spending productively, slowing growth and inhibiting a larger continental recovery.</p>
<p>“If you have secular [long-term] stagnation, what you need is expansionary fiscal policy,” says Temin, who is the Elisha Gray II Professor Emeritus of Economics at MIT.</p>
<p>Additional government spending is distinctly not the approach that Europe (and, to a lesser extent, the U.S.) has pursued over the last six years, as political leaders have imposed a wide range of spending cuts — the pursuit of “austerity” as a response to hard times. But Temin thinks it is time for the terms of the spending debate to shift. &nbsp;</p>
<p>“The hope David and I have is that our simple little book might change people’s minds,” Temin says.</p>
<p><strong>“Sticky” wages were the sticking point</strong></p>
<p>In an effort to do so, the authors outline an intellectual trajectory for Keynes in which he was highly concerned with international, trade-based growth from the early stages of his career until his death in 1946, and in which the single-country policy framework of his “General Theory” was a necessary simplification that actually fits neatly with this global vision.</p>
<p>As Temin and Vines see it, Keynes, from early in his career, and certainly by 1919, had developed an explanation of growth in which technical progress leads to greater productive capacity. This leads businesses in advanced countries to search for international markets in which to sell products; encourages foreign lending of capital; and, eventually, produces greater growth by other countries as well.</p>
<p>“Clearly, Keynes knew that domestic prosperity was critically determined by external conditions,” Temin and Vines write.</p>
<p>However, in their view, Keynes had to overcome a crucial sticking point in his thought: As late as 1930, when Keynes served on a major British commission investigating the economy, he was still using an older, neoclassical idea in which all markets reached a sort of equilibrium.&nbsp;</p>
<p>This notion implies that when jobs were relatively scarce, wages would decline to the point where more people would be employed. Yet this doesn’t quite seem to happen: As economists now recognize, and as Keynes came to realize, wages could be “sticky,” and remain at set levels, for various psychological or political reasons. In order to arrive at the conclusions of the “General Theory,” then, Keynes had to drop the assumption that wages would fluctuate greatly.</p>
<p>“The issue for Keynes was that he knew that if prices were flexible, then if all prices [including wages] could change, then you eventually get back to full employment,” Temin says. “So in order to avoid that, he assumed away all price changes.”</p>
<p>But if wages will not drop, how can we increase employment? For Keynes, the answer was that the whole economy had to grow: There needed to be an increase in aggregate demand, one of the famous conclusions of the “General Theory.” And if private employers cannot or will not spend more money on workers, Keynes thought, then the government should step in and spend.</p>
<p>“Keynes is very common-sense,” Temin says, in “that if you put people to work building roads and bridges, then those people spend money, and that promotes aggregate demand.”</p>
<p>Today, opponents of Keynes argue that such public spending will offset private-sector spending without changing overall demand. But Temin contends that private-sector spending “won’t be offset if those people were going to be unemployed, and would not be spending anything. Given jobs, he notes, “They would spend money, because now they would have money.”</p>
<p>Keynes’ interest in international trade and international economics never vanished, as Temin and Vines emphasize. Indeed, in the late stages of World War II, Keynes was busy working out proposals that could spur postwar growth within this same intellectual framework — and the International Monetary Fund is one outgrowth of this effort.</p>
<p><strong>History repeating?</strong></p>
<p>“Keynes: Useful Economics for the World Economy” has received advance praise from some prominent scholars. French economist Thomas Piketty calls the book “highly relevant for today’s world,” while the Oxford economist Simon Wren-Lewis says it “brings Keynesian thinking alive,” and is “a fascinating exploration of a revolution in economic thought.”</p>
<p>Nonetheless, Temin is guarded about the prospect of changing the contemporary austerity paradigm.</p>
<p>“I can’t predict what policy is going to do in the next couple of years,” Temin says. And in the meantime, he thinks, history may be repeating itself, as debtor countries are unable to make capital investments while paying off debt.</p>
<p>Germany has “decided that they are not willing to take any of the capital loss that happened during the crisis,” Temin adds. “The [other] European countries don’t have the resources to pay off these bonds. They’ve had to cut their spending to get the resources to pay off the bonds. If you read the press, you know this hasn’t been working very well.”</p>
Economics, SHASS, Faculty, Books and authors, MIT PressSaid and Done for Summer 2014http://newsoffice.mit.edu/2014/said-and-done-summer-2014
Digest of the MIT humanities, arts, and social sciencesMon, 11 Aug 2014 17:27:01 -0400School of Humanities, Arts, and Social Scienceshttp://newsoffice.mit.edu/2014/said-and-done-summer-2014<p>Published monthly during the School terms, and once in the summer,&nbsp;Said and Done<em>&nbsp;is a&nbsp;photo-rich digest from MIT's School of Humanities, Arts, and Social Sciences, integrating feature articles with news and&nbsp;research to give a distilled overview of the school's endeavors. For the complete online edition, visit&nbsp;<a href="http://bit.ly/SDAug" style="color: rgb(246, 37, 18); text-decoration: none;" target="_blank">Said and Done</a>. Highlights of the Summer 2014 edition include:</em></p>
<p>HISTORY<br />
<strong>The Historian's Lab&nbsp;</strong>|<strong>&nbsp;Christopher Capozzola</strong><br />
"For historians our laboratories are libraries and archives. It’s where we play around with the raw materials, where we make discoveries. We experiment. We put one set of theoretical ideas about how society is structured, how culture works, next to the raw data — that might be a set of letters, or oral histories — in the same way that a chemist puts a theory against a particular set of chemicals in a reaction."<br />
<a href="http://bit.ly/1u8mJLH" style="color: rgb(153, 0, 0);" target="_blank">Story by Laurie Everett for Spectrum Continuum</a></p>
<p>LANGUAGE&nbsp;AND NATION-BUILDING&nbsp;<br />
<strong style="line-height:1.6">A Creole solution for Haiti's Woes</strong><span style="line-height:1.6">&nbsp;|&nbsp;</span><strong style="line-height:1.6">Michel DeGraff</strong><span style="line-height:1.6">&nbsp;</span><strong style="line-height:1.6">and Molly Ruggles&nbsp;</strong><br />
In a piece for&nbsp;<em>The New York Times</em>, Professor of Linguistics Michel DeGraff and Molly Ruggles, Senior Educational Technology Consultant at MIT OEIT, write of the need for Haitian students to learn in Haitian Creole (Kreyòl), rather than in French, which is spoken by only 5 percent of the Haitian population. “Creole holds the potential to democratize knowledge, and thus liberate the masses from extreme poverty,” DeGraff and Ruggles explain.<br />
<a href="http://nyti.ms/1sf8eCQ" target="_blank">Commentary in <em>The New York Times</em></a></p>
<p>ECONOMICS&nbsp;<br />
<strong>Q&amp;A&nbsp;</strong>|<strong>&nbsp;David Autor on U.S. inequality issues among the “99 percent”</strong><br />
In an article in&nbsp;<em>Science</em>, MIT economist Autor moves the U.S. inequality discussion beyond the 1 percent vs. 99 percent comparison. In the long run, he says, "the best policies we have to combat inequality involve investing in our citizenry. Higher education, and public education, is America’s best idea. Those investments also include preschool, good primary&nbsp;and secondary schools, and adequate nutrition&nbsp;and health care."<br />
<a href="http://bit.ly/1jbkGuU" target="_self">Story by Peter Dizikes for MIT News</a></p>
<p><strong>SHASS announces the 2014 Levitan Awards for Excellence in Teaching</strong><br />
The 2014 Levitan Awards recognize nine outstanding teachers, nominated by students.<br />
<a href="http://bit.ly/1mXryzG" target="_self">Story</a><br />
<br />
KNIGHT SCIENCE JOURNALISM PROGRAM AT MIT&nbsp;<br />
<strong>Pulitzer Prize-winning journalist Deborah Blum to head Knight Science Journalism at MIT&nbsp;</strong><br />
<strong>Wade Roush is Interim Director&nbsp;</strong><br />
Deborah Blum will join MIT in 2015 as the director of Knight Science Journalism at MIT, a fellowship program that enables superb mid-career journalists to spend a year at MIT studying everything from science and technology to history, literature, policy, and political science.&nbsp;Blum will assume the role in July 2015. During the 2014-15 academic year, the KSJ program will be led by Wade Roush, former editor-at-large at the online innovation news service Xconomy.&nbsp;<br />
<a href="http://newsoffice.mit.edu/2014/deborah-blum-knight-science-journalism-director" style="color: rgb(153, 0, 0);">Story</a><strong>&nbsp;&nbsp;</strong>|<strong>&nbsp;</strong><a href="http://bit.ly/1pxt0M2" style="color: rgb(153, 0, 0);" target="_blank">From Wade Roush's blog: "Back to the Future at MIT"</a></p>
<p>MUSIC + ENGINEERING&nbsp;<br />
<strong>Gamma sonification</strong>&nbsp;|&nbsp;<strong>MIT students make music from particle energy</strong><br />
Midway through Keeril Makan's “Introduction to Composition” class, three MIT nuclear engineering students had invented a technique to create sound textures from the energy of the decaying atom.&nbsp;<br />
<a href="http://bit.ly/U03RyP" style="color: rgb(153, 0, 0);" target="_self">Story</a></p>
<p>POLITICAL SCIENCE&nbsp;<br />
<strong>3 Questions&nbsp;</strong>|&nbsp;<strong>Johannes Haushofer on the psychology of poverty</strong><br />
Does a mental “feedback loop” prevent the poorest from exploring ways to change their lives?<br />
<a href="http://bit.ly/1mcsD5z" target="_self">Story by Peter Dizikes for MIT News</a></p>
<p>INNOVATION<br />
<strong style="line-height:1.6">The online SHASS Guide to Innovation in Education &nbsp;</strong><br />
This new four-part websection includes a trove of information and resources about teaching innovation in our School. The section is designed for use by SHASS faculty who are thinking about developing a&nbsp;new class, or a new approach in an existing class. Information includes funding sources; guidelines and timelines; awards given; and examples of successful endeavors.<br />
<a href="http://bit.ly/1jzUdhy" target="_blank">Explore&nbsp;</a><br />
<br />
SCIENCE WRITING&nbsp;<br />
<strong>The New Yorker &nbsp;</strong>|<strong>&nbsp;One of a Kind&nbsp;</strong>|<strong>&nbsp;Seth Mnookin&nbsp;</strong><br />
What do you do if your child has an ultra-rare condition that is new to science?" In this&nbsp;<em>New Yorker</em>&nbsp;essay, Mnookin, co-director of the Graduate Program in Science Writing, explores how open science, next-generation sequencing, social media, and families are affecting the way rare diseases are discovered, studied, and treated.<br />
<a href="http://nyr.kr/1wGMuyW" target="_blank">Article in <em>The New Yorker</em></a><em> </em>(<em>paywall removed for the summer</em>) |&nbsp;<a href="http://wgbhnews.org/post/bpr-politics-market-basket-all-revved-pointless-neighborhood-happiness-seth-mnookin" style="color: rgb(153, 0, 0);" target="_blank">Audio interview on WBUR</a></p>
<p>COMPARATIVE MEDIA STUDIES / WRITING<br />
<strong>Coco Fusco joins MIT SHASS as an MLK Visiting Scholar for 2014-15</strong><br />
The School of Humanities, Arts, and Social Sciences is honored and excited to welcome the acclaimed artist and writer Coco Fusco&nbsp;to the MIT community for the 2014-15 academic year.&nbsp;Fusco will serve as a visiting associate professor in the Comparative Media Studies/Writing (CMS/W) program. She will be hosted by Edward Schiappa, the John E. Burchard Professor of Humanities&nbsp;and head of CMS/W, and Pulitzer Prize-winning author Junot Díaz, the Rudge and Nancy Allen Professor of Writing.<br />
<a href="http://bit.ly/1iJx8Zm" target="_self">Story </a></p>
<p><strong>Bookshelf</strong><br />
The research of MIT's School of Humanities, Arts, and Social Sciences appears principally in the form of books, publications, and music and theater productions. These gems of the School provide new knowledge and analysis, innovation and insight, guidance for policy, and nourishment for lives.<br />
<a href="http://bit.ly/PPa5ts" target="_blank">Take a look</a></p>
<p><strong>The Listening Room </strong><br />
<a href="http://bit.ly/PMgAS8" target="_blank">MIT's finest music online</a></p>
<p><strong>TOUR de SHASS online</strong><br />
<a href="http://bit.ly/17Zk5Ia" target="_blank">Explore MIT's humanities, arts, and social science fields</a></p>
History, Science writing, Music, Awards, honors and fellowships, Linguistics, Political science, Economics, Literature, languages and writing, Anthropology, Faculty, Students, Research, Humanities, Social sciences, Arts, SHASSMIT economist Nancy Rose to take Department of Justice positionhttp://newsoffice.mit.edu/2014/mit-economist-nancy-rose-takes-department-of-justice-position-0731
Expert in regulation and market competition will take leave to spearhead DOJ’s economic analysis. Thu, 31 Jul 2014 10:15:00 -0400Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2014/mit-economist-nancy-rose-takes-department-of-justice-position-0731<p>MIT economist Nancy Rose, an expert on firm behavior and the economics of regulated industries, has been named by the U.S. Department of Justice (DOJ) as deputy assistant attorney general for economic analysis. She will take a leave of absence from the Institute in order to take the position, which formally begins on Sept. 8. &nbsp;&nbsp;</p>
<p>Rose, who is the Charles P. Kindleberger Professor of Applied Economics, will lead a staff of about 50 economists conducting research for DOJ’s Antitrust Division, while also working with DOJ leaders in establishing policy priorities.</p>
<p>“I became an economist because I was very interested in public policies at the intersection of competition policy and regulation,” Rose told <em>MIT News</em>. “This is an exciting opportunity to pivot from research to a direct role in applying economics to guide public policy that promotes a competitive and open marketplace.”</p>
<p>Economists in DOJ’s Antitrust Division work with their legal counterparts in the division to assess the likely impact of proposed mergers on consumers and market outcomes; to investigate potential anti-competitive practices in markets; and to provide policy guidance on practices that may impede marketplace competition.</p>
<p>“There is a large and extraordinarily talented group of professional economists within the division,” Rose said. “I hope to contribute to their effectiveness, and I expect to learn from them as well.”</p>
<p>Rose received her undergraduate degree in economics and government at Harvard University in 1980, and her PhD in economics from MIT in 1985. Her first faculty position was at the MIT Sloan School of Management, which she joined in 1985. She has been on the faculty of the Department of Economics since 1994. Rose has also served as the director of the National Bureau of Economic Research’s program in industrial organization since its establishment in 1991.</p>
<p>Rose has published extensively on industries including electricity generation and transmission, airlines, and other transportation sectors. She has received multiple teaching awards, and was named a Margaret MacVicar Faculty Fellow in 2012, MIT’s highest honor for undergraduate teaching.</p>
<p>“My teaching increasingly has used antitrust cases to illustrate both competitive strategy and policy issues,” Rose noted. “I’ve enjoyed using Department of Justice actions to tee up discussions of current issues in competition policy. It’s exciting to now have the chance to be part of that process.”</p>
<p>Rose will replace Aviv Nevo, a Northwestern University economist who has held the position since April 2013.</p>
Faculty, Economics, SHASS, MacVicar fellows3 Questions: Johannes Haushofer on the psychology of povertyhttp://newsoffice.mit.edu/2014/3-questions-johannes-haushofer-psychology-poverty-0527
Does a mental “feedback loop” prevent the poorest from exploring ways to change their lives?Tue, 27 May 2014 00:00:01 -0400Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2014/3-questions-johannes-haushofer-psychology-poverty-0527<p><em>The World Health Organization has estimated that 1.5 billion people live on less than $1 a day. One of the mechanisms through which poverty perpetuates itself may be psychological: Being poor seems to create greater levels of stress, negative affect, and depression, which themselves can lead people toward short-term, risk-averse decisions, constraining their ability to find a long-term path out of poverty. Johannes Haushofer, a postdoc at MIT’s Abdul Latif Jameel Poverty Action Lab, is co-author (with Ernst Fehr, an economist at the University of Zurich) of an article in this week’s issue of </em>Science<em> examining the evidence on this feedback loop. To be sure, Haushofer notes, there are great material constraints on the very poor, and additional good reasons for the poor to be risk-averse, such as limited access to low-interest borrowing. Still, he asserts, we can learn much more about the psychological condition of the very poor. </em></p>
<p><strong>Q.</strong> What is the hypothesis that you and others are exploring about the psychology of being poor?</p>
<p><strong>A. </strong>Our question is if poverty has psychological consequences, even neurobiological consequences, which in turn affect the way people make economic decisions. If you put those two links together that might be one way poverty perpetuates itself — through psychological channels. That’s not to say the poor are somehow intrinsically deficient, or to blame for their poverty. It’s saying precisely the opposite, in fact: It’s asking what the power of the situation is to cause certain types of behaviors.</p>
<p>Poverty changes so many things about people’s lives that it would be a bit surprising if it didn’t also change the way [people] think. It seems like a no-brainer that poverty causes stress, and that stress may affect economic choices, but it turns out we didn’t really have a very good answer to that until very recently. The research I, and others, have done over the last couple of years has tried to make a dent in these questions.</p>
<p><strong>Q.</strong> What is the evidence for this?</p>
<p><strong>A.</strong> There is now a growing number of studies showing that … within and across countries, poorer people tend to be more stressed and have higher levels of cortisol, which is the body’s main stress hormone, than richer people. But, of course, we want to understand if this is a causal relationship due to changes in income. One way of doing this is to make people less poor, to see if they become less stressed. The other is to find situations where people become poorer. Obviously that’s not something we would do in an experiment, but unfortunately there are sometimes events that make people poorer.</p>
<p>Both increases and decreases in income turn out to both affect stress, in opposite directions. My co-author Jeremy Shapiro — an MIT economics PhD student — and I did a randomized, controlled experiment in Kenya where we gave people $700 with no strings attached, almost their yearly income, and asked if they were more or less stressed. … We saw improvements in happiness, reductions in stress and depression, and decreases in cortisol levels for some types of transfers.</p>
<p>Other people have studied this question using lotteries. There is a very nice recent study from Sweden, which shows a decrease in the consumption of [mental-health drugs] after people win the lottery.</p>
<p>Conversely, my colleagues Matthieu Chemin and Joost de Laat and I did a study in Kenya of farmers who experienced negative income shocks through drought. We observed increases in levels of both self-reported stress and cortisol. So it looks like there’s a causal effect there.</p>
<p>Now, on the effect of stress and negative emotions on decision-making, there’s a growing body of evidence showing that stress makes people more risk-averse and more impatient. Jennifer Lerner at Harvard has done a series of landmark studies on this question. In one really nice experiment, she and her co-authors showed that making people sad makes them very impatient. Sandra Cornelisse, Vanessa van Ast, Marian Joels, and I did a study where we give people a pill that raises cortisol levels in the brain and we find that this, too, makes them more impatient.</p>
<p>Similarly, a number of studies show that stress increases risk-aversion: For instance, Anthony Porcelli and Mauricio Delgado showed that stress induced by mild physical pain makes people prefer rewards that are safer, not riskier. And Narayanan Kandasamy used the pills I described above to raise cortisol levels, and also found that people are [then] more likely to choose the safe outcome.</p>
<p>If you put this together, it suggests that by virtue of being poor, you’re stressed, and if you’re stressed, you’re even more risk-averse and impatient than you otherwise would be. That’s an additional factor that may keep you from investing in long-term outcomes, like education, health, fertilizer, and so on.</p>
<p><strong>Q.</strong> Where would you like to see more research in this field?</p>
<p><strong>A.</strong> There are two main areas where I’d like progress to be made. The first is: You don’t want people to be unduly stressed or depressed. These are welfare outcomes in their own right. I would like to see more interest in measuring psychological well-being directly, both through questionnaires and these biomarkers we now have. The second thing is that if this feedback loop exists, we want to break it. There are three natural places you can attach levers. You can try to alleviate poverty [through cash transfers, for instance]; you can try to improve decision-making through small nudges to behavior; and you can address the third component, stress. On the third of these points — the effect of alleviating stress on poverty — there is very little work, and this is an area where we urgently need progress. Once we have an answer to this question, we can choose the intervention that’s most effective. For example, one day we may look at the evidence and say, “OK, it looks like alleviating stress [directly] doesn’t do as much as just giving people money.” Then we’ll have learned something.</p>
Floodwaters surrounding houses in Dhaka, BangladeshEconomics, Psychology, Development economics, Poverty, Abdul Latif Jameel Poverty Action Lab (J-PAL), 3 QuestionsMIT Sloan professor Kristin Forbes named to UK Monetary Policy Committeehttp://newsoffice.mit.edu/2014/mit-sloan-professor-kristin-forbes-named-uk-monetary-policy-committee
Economics professor will serve three-year term helping to guide policy.
Thu, 22 May 2014 17:09:12 -0400MIT Sloan School of Managementhttp://newsoffice.mit.edu/2014/mit-sloan-professor-kristin-forbes-named-uk-monetary-policy-committee<p>MIT Sloan professor Kristin Forbes has been appointed as an external member of the U.K. Monetary Policy Committee (MPC) by Chancellor of the Exchequer George Osborne. In this role, she will hold one of the nine votes that determine the country’s monetary policy.</p>
<p>In announcing the appointment, Osborne said, “Monetary policy plays a critical role in our long-term economic plan, delivering economic security to hardworking people. Forbes is an economist of outstanding ability with real practical experience of policy making. She will make an exceptionally strong addition to the MPC. It’s a sign of the high regard in which the Bank of England and our monetary framework are held around the world that someone of Kristin’s ability wishes to be part of them.”</p>
<p>Forbes is currently the Jerome and Dorothy Lemelson Professor of Management at MIT Sloan. Her research focuses on policy issues in international macroeconomics. Recent projects have included work on capital flows, financial crises, and contagion.</p>
<p>Forbes, who earned her PhD in economics at MIT Sloan, has won multiple teaching awards during her time on the faculty.</p>
<p>From 2003 to 2005, Forbes served as the youngest-ever member of the White House Council of Economic Advisers. She has also worked at the U.S. Treasury, the World Bank, and Morgan Stanley. She is on the Panel of Economic Advisers for the Congressional Budget Office and the Academic Advisory Board for both the Peterson Institute for International Economics and the Center for Global Development. She is a member of the Council on Foreign Relations and a research associate at the National Bureau of Economic Research.</p>
<p>Forbes will serve a three-year term on the MPC but maintain a part-time affiliation with MIT as her time permits.</p>
Kristin ForbesMIT Sloan School of Management, Faculty, EconomicsQ&amp;A: David Autor on inequality among the “99 percent”http://newsoffice.mit.edu/2014/qa-david-autor-inequality-among-99-percent-0522
In new Science piece, MIT economist aims to move the inequality discussion beyond the “1 percent.”Thu, 22 May 2014 14:00:00 -0400Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2014/qa-david-autor-inequality-among-99-percent-0522<p><em>Today’s wealth gap does not just exist between the richest 1 percent of the population and everyone else; there have been growing inequalities among the less-wealthy 99 percent of people, too. In an article published today in </em>Science<em>, MIT economist David Autor contends that much of our present inequality stems from disparities in education. This has evolved in two directions: From 1980 to 2012, inflation-adjusted, full-time earnings of college-educated males increased anywhere from 20 percent to 56 percent, depending on whether they also acquired graduate degrees. Conversely, real earnings of high school graduates fell 11 percent, and earnings of high school dropouts fell 22 percent. </em>MIT News<em> talked with Autor about inequality.</em></p>
<p><strong>Q.</strong> You are focused on inequality among the so-called “99 percent,” not between the 1 percent and the 99 percent. Why?</p>
<p><strong>A.</strong> There’s a real national debate about the significance and causes of inequality. This public debate is dominated by the discussion of the top 1 percent. And the top 1 percent is important, but focusing on the top 1 percent conveys the message that the game is all rigged, that if you’re not in the elite stratum, there’s nothing to shoot for. And that’s just not the case. The growth of skill differentials among the other 99 percent is arguably even more consequential than the rise of the 1 percent for the welfare of most citizens.</p>
<p>Here’s a concrete way to see it: The earnings gap between the median college-educated two-income family and the median high school-educated two-income family rose by $28,000 between 1979 and 2012. This [shift] — which excludes the top 1 percent, since we’re focusing on medians — is four times as large as the redistribution that has taken place from the bottom 99 percent to the top 1 percent of households in the same period.</p>
<p><strong>Q.</strong> What accounts for inequality among the 99 percent, then?</p>
<p><strong>A.</strong> The single most important factor is the rising return on postsecondary education. That explains a lot of the growth and variance, and that is pretty well explained by supply and demand factors. There was a sharp deceleration in production of newly minted college graduates from about 1980 forward, and that led immediately to a growth in the skill premium. After 2005 there’s been an acceleration in production of college graduates, and you see the skill differential start to plateau.</p>
<p>If you had to give a person a single piece of economic advice, it would not be: Act like Gatsby and try to get into the top 1 percent. It would be: Go get a college education at a decent school.</p>
<p>Now, there are many other factors that are affecting the wage distribution … de-unionization, the [inflation-adjusted] decline in minimum wage, [the growth of] international trade, which has led to a big decline in manufacturing, and technological change, which drives demand for more-skilled workers. These things all interact.</p>
<p><strong>Q.</strong> In the <em>Science </em>article, you write that, “Confronting the cost of college should not obscure the fact that the real lifetime earnings premium to college education has likely never been higher.” What has that premium looked like in the past?</p>
<p><strong>A.</strong> We have data going back to 1915 on the skill premium. … It was high on the eve of the second World War, declined very rapidly during the war, [then] was stable through the 1960s, and came down through the 1970s, partly due to an influx of college graduates [receiving draft deferments] because of the Vietnam War. Then there was this grand acceleration, and it rose more or less continuously, for three decades, and plateaued over the last several years.</p>
<p>People say, “Ah, the college premium has stopped rising,” and that’s true, but it has plateaued at an incredibly high level. The relative wage differential between college and high school graduates is higher than it’s ever been. Now, college has gotten more expensive, but relative to the lifetime earnings differential, it’s still quite an attractive investment proposition.</p>
<p>Recent estimates find that for men the lifetime present value [after subtracting tuition costs] has risen from $213,000 to $590,000 between 1965 and 2010, and for women it’s risen from $129,000 to $370,000. So it’s risen by a quarter-million dollars. … The type of counterproductive myth I’m trying to puncture in this article is that it’s all about the 1 percent, if you go to college you’re wasting your money, if you’re not the “Wolf of Wall Street,” the game is over. That’s just destructively incorrect.</p>
<p><strong>Q.</strong> You contend that inequality is not altogether bad. So how do we assess if it has gone too far?</p>
<p><strong>A.</strong> There’s a value to inequality in a market economy. Inequality provides incentives. But you can have too much inequality, or too little. The concern about inequality is where economic dynamism gives way to dynasticism, and inequality becomes self-reinforcing: If you don’t “choose the right parents,” you’re stuck in the bottom forever. Now, we have metrics of that, and the evidence so far is that U.S. economic mobility has not been high in a very long time, since the early 20th century, but has not declined, as far as we can tell. Another metric is absolute well-being, in terms of earnings and labor force participation, and I think there’s real concern there.</p>
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<p><strong>Q.</strong> What policies can combat inequality?&nbsp;</p>
<p><strong>A.</strong> In the long run, the best policies we have involve investing in our citizenry. … Higher education, and public education, is America’s best idea. Our decision to send our entire public through high school over the first 30 years of the 20th century was probably the single most important factor in U.S. economic predominance for that century. Those investments [include] preschool, good primary and secondary schools, [and] adequate nutrition and health care.</p>
<p>In the short run, the Earned Income Tax Credit has been a successful policy, but it’s primarily targeted at women with kids. Our biggest problem has been declining labor force participation among men without current dependents, so that could be expanded. We can actually afford to raise the minimum wage. We can stop incarcerating so many people — that would save us a bunch of money and improve people’s lives over the long run. The Affordable Care Act may have benefits in terms of people’s skills development, if giving people adequate access to health care when they’re young affects their cognitive capacity.</p>
David AutorEconomics, Inequality, Policy, Higher education, Education, teaching, academicsMorris Adelman, MIT economics faculty member for more than six decades, dies at 96 http://newsoffice.mit.edu/2014/morris-adelman-mit-economics-faculty-member-over-six-decades-dies
Known for influential research in industrial organization and energy economics.Thu, 15 May 2014 18:28:01 -0400School of Humanities, Arts, and Social Scienceshttp://newsoffice.mit.edu/2014/morris-adelman-mit-economics-faculty-member-over-six-decades-dies<p>Morris Adelman, an MIT economics faculty member for more than six decades, passed away on May 8 at the age of 96.&nbsp;</p>
<p>Adelman<span style="line-height: 1.6em;"> made important contributions in both industrial organization and energy economics.&nbsp;He&nbsp;was known for his landmark 1955 study of vertical integration, which described both the economic consequences of integration and the difficulty of measuring it, and for his 1959 analysis of the cost structure of the A&amp;P supermarket chain, which argued that this pathbreaking national grocery chain achieved lower prices because of cost advantages over smaller rivals, not because of anticompetitive pricing.&nbsp;</span></p>
<p><span style="line-height: 1.6em;">In the 1960s and 1970s, </span>Adelman<span style="line-height: 1.6em;"> turned his attention to energy economics.&nbsp;His 1972 classic, "World Petroleum Markets,"&nbsp;</span><span style="line-height: 1.6em;">offered a careful analysis of the sustainability of cartel pricing by OPEC and an optimistic long-term outlook for competition in the global oil market.</span></p>
<p>Adelman<span style="line-height: 1.6em;"> was an undergraduate at City College of New York, from which he graduated in 1938.&nbsp;He received his PhD&nbsp;from Harvard University in 1948.&nbsp;He came to MIT in 1948 as part of the postwar expansion of the MIT Department of </span>Economics,&nbsp;<span style="line-height: 1.6em;">and remained affiliated with MIT for the next 65 years.&nbsp;After retiring, he remained actively involved with the Center for Energy and Environmental Policy Research.</span></p>
Morris Adelman, professor emeritus of economics, in the 1950sFaculty, Obituaries, EconomicsBarriers to opportunityhttp://newsoffice.mit.edu/2014/barriers-opportunity
Thu, 08 May 2014 21:00:01 -0400Resource Developmenthttp://newsoffice.mit.edu/2014/barriers-opportunity<p>How much does your neighborhood determine your life chances? Sociologist and urban planner Xavier de Souza Briggs recently completed a 20-year social experiment on ghetto poverty that asked: If people in high-poverty, high-risk areas of the inner city moved to low-poverty areas, would their lives change for the better?</p>
<p>The findings revealed that while many study participants “successfully” escaped dangerous and stressful neighborhoods at first, most did not escape income poverty, and many ended up living back in high-poverty areas after a few years. Briggs and his collaborators wanted to know why.</p>
<p>The experiment was conducted in five U.S. metro areas: Baltimore, Boston, Chicago, Los Angeles, and New York. While the experiment showed that it was possible to dramatically improve quality of life for the poor, helping them escape poverty was another matter. “Many of us underestimated the barriers to employment, for example, for this highly disadvantaged group, and how small a difference relocation alone would make,” says Briggs, an associate professor of urban studies and planning.</p>
<p>“Severely disadvantaged people are often information-poor, lacking job networks and networking skills," he adds. "For one thing, they lack essential information about which job training opportunities are most likely to pay off. People throughout America, especially the poor, are constantly marketed to with ads that promise jobs that won’t exist for them.”</p>
<p>Low-income families face other complex challenges as well. “When people are juggling on the bottom of the ladder, they don’t need access to just a job," Briggs says. "They need an affordable apartment and affordable child care. Most of these families are headed by single mothers, who are at much greater risk of persistent poverty&nbsp;than other types of households,” he says of the findings detailed in his book, "Moving to Opportunity: The Story of an American Experiment to Fight Ghetto Poverty."</p>
<p>The barriers were the greatest in sprawling Los Angeles, Briggs says. “The physical distances are so enormous, and many jobs are not accessible by public transportation. We spent time with moms who were getting up at 4 a.m. and driving 25 miles in one direction to leave their kids with a family member, and&nbsp;then 30 miles in another direction to work at a job where they might be put on a different shift, on a moment’s notice. The job itself was insecure, volatile, and poorly compensated. Lining up housing, work, and child care, and keeping them aligned,&nbsp;was immensely difficult.”</p>
<p>On the upside were dramatic changes in safety and security, particularly for young girls. They fared better overall in these new neighborhoods, escaping the predatory climate of their old neighborhoods. And parents in the study saw major reductions in anxiety and&nbsp;depression, and improvements in mental health, likely because of increased security and “freedom from fear.”</p>
<p>“I would love to have seen impacts on economic opportunity,” Briggs says. “We thought that moving might affect access to useful networks of people who were employed and had better information, or that being physically closer to certain kinds of jobs might make a difference. But as it turned out, those changes did not develop. And what’s more, the families’ footholds in safer areas were insecure, because of the scarcity of affordable rental housing in these markets.”</p>
Xavier de Souza BriggsFaculty, Research, Urban studies and planning, Urban planning, Poverty, Sociology, EconomicsSearch without rewardhttp://newsoffice.mit.edu/2014/conference-highlights-plight-of-long-term-unemployed-0507
MIT conference highlights the plight of the long-term unemployed, a social issue of growing urgency.Wed, 07 May 2014 13:30:00 -0400Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2014/conference-highlights-plight-of-long-term-unemployed-0507<p>When workers remain unemployed for more than six months at a time, the toll is not just financial — it’s psychological. Again and again, the long-term unemployed describe themselves as having entered a “black hole” that they cannot seem to climb out of, according to the studies of MIT’s Ofer Sharone, who has extensively interviewed such workers.</p>
<p>This psychological toll occurs, in part, because workers sense that their joblessness is being held against them as they hunt for new work. And they are right: Employment data shows a steep drop-off in the proportion of workers hired after being out of work for six months, even if their job skills are highly relevant to the jobs available.</p>
<p>This increasingly high-profile problem was the subject of a MIT conference on Tuesday. Hosted by the MIT Sloan School of Management, the event featured almost 20 speakers from academia, government, and industry.</p>
<p>“It’s a moral issue,” said Sharone, an assistant professor of work and employment research. “It’s these individuals who we, as a society, are asking to pay the price, with their life savings, their homes. … Many of them come to fear that something is wrong with them.”</p>
<p>The numbers show just how sharply the burden of joblessness has fallen on the long-term unemployed. Some 9.8 million Americans are currently unemployed, creating an official unemployment rate of 6.3 percent. About 3.5 million of these are long-term unemployed, often workers over 55 whose dependent families suffer greatly as a result. According to Benjamin Seigel, a senior policy advisor at the U.S. Department of Labor, about 2.3 percent of workers are now among the long-term unemployed — roughly twice the historical average.</p>
<p>This means that while short-term unemployment has reverted to something close to typical levels, long-term unemployment has not. “The long-term unemployed are probably not structurally unemployed,” said Rand Ghayad, a visiting scholar at the Boston Federal Reserve. It is less likely they are suffering from a mismatch of skills, in his view, than from biases in the hiring process. An attention-grabbling experiment he recently conducted, by sending out fictitious resumes to firms, seems to have confirmed as much.</p>
<p>“We need a sense of urgency for this particular problem, long-term unemployment, in this country,” said Eric M. Seleznow, acting assistant secretary at the U.S. Department of Labor, in the conference’s keynote talk.</p>
<p><strong>“Not enough jobs”</strong></p>
<p>In that vein, much of the conference concerned the usefulness of various interventions for helping the long-term unemployed. As Seleznow pointed out in his remarks, the issue is on the White House’s radar; in late January, President Barack Obama hosted a one-day summit on the subject, citing Ghayad’s research and getting hundreds of companies to sign a pledge that they would not discriminate against unemployed job-hunters.</p>
<p>Leaders of several job-search and job-match programs discussed the strategies they use to get dejected workers back into active search mode, including networking, education programs, and other types of counseling; as some speakers noted, the long-term unemployed seem particularly prone to subsequent psychological problems.&nbsp;</p>
<p>However, in tight economic times, the funding available for nonprofit job-search organizations has also dwindled, making it harder for many workers to stay afloat in the job market.</p>
<p>“The level of public support we need to address this problem has been on a steady downward decline,” said Jerry Rubin, president and CEO of Jewish Vocational Services of Boston, an established search program. That decline is occurring as the need for resources grows: Rubin said that since the onset of the economic crisis in 2008, the average time his program’s participants spend looking for a job has increased from two months to nine months.</p>
<p>“In the big picture, there are not enough jobs for all these job seekers,” said John R. Fugazzie, founder of Neighbors-helping-Neighbors USA, a networking group for job-hunters.</p>
<p><strong>“Never would have imagined I’d be out of work for two years”</strong></p>
<p>The conference was also attended by a number of job-seekers and job-search experts, who were there to network and look for new ideas. Brian Melket, a white-collar IT worker from Massachusetts with years of employment experience in data centers, has been looking for a job for two years. He has been participating in Neighbors-helping-Neighbors, among other organizations.</p>
<p>“It’s been difficult,” Melket said. He added: “I never would have imagined I’d be out of work for two years. I had assumed three or four months.”</p>
<p>Still, Melket is maintaining an active search and was attending the conference partly to obtain new information or contacts: “You have to get off the couch,” he said.</p>
<p>Matt Casey, a career coach based in Cambridge, first encountered Sharone’s work a few years ago. Casey encourages clients, both with and without jobs, to evaluate the elements of a job that are most important to them, and then think broadly about new employment opportunities that may relate to those priorities.</p>
<p>“For the long-term unemployed, they feel there is something wrong and [think], ‘I don’t know how to fix it,’” Casey said. However, he added, the bottom-heavy job market has made many workers apprehensive that any kind of rigorous career examination will only lead to disappointment.</p>
<p>“People are fearful that there won’t be enough opportunities after that exploration,” Casey said.</p>
<p>Indeed, the lack of well-paying permanent jobs remains the biggest issue surrounding long-term unemployment. Strategies to level the job-search playing field for the long-term unemployed may be vital, but as Boston College professor David Blustein noted in the day’s final talk, there is no substitute for abundant opportunity.</p>
<p>“We need to create work for people so they can rebuild their shattered lives,” Blustein said.</p>
MIT professor Ofer Sharone speaks at a conference, "The Crisis of Long-Term Unemployment," on May 6 at MIT.Work and family life, Careers, Jobs, Unemployment, Personal finance, Special events and guest speakers, EconomicsFour professors elected to the National Academy of Scienceshttp://newsoffice.mit.edu/four-professors-elected-national-academy-sciences
Acemoglu, Brown, Grossman, and Grove bring to 77 the number of MIT faculty who are NAS members.Wed, 30 Apr 2014 13:07:23 -0400News Officehttp://newsoffice.mit.edu/four-professors-elected-national-academy-sciences<p>Four MIT professors have been named to the prestigious National Academy of Sciences (NAS), an honor recognizing distinguished and continuing achievements in original research.</p>
<p>This year’s new NAS members are <a href="http://economics.mit.edu/faculty/acemoglu/index.htm">Daron Acemoglu</a>, the James R. and Elizabeth Killian Class of 1926 Professor in Applied Economics; <a href="http://bcs.mit.edu/people/brown.html">Emery Brown</a>, the Edward Hood Taplin Professor of Medical Engineering and professor of computational neuroscience;&nbsp;<a href="https://biology.mit.edu/people/alan_grossman">Alan Grossman</a>, the Praecis Professor of Biology; and <a href="http://web.mit.edu/tlgrove/www/">Timothy Grove</a>, the Cecil and Ida Green Professor in Earth and Planetary Sciences.</p>
<p>Including these four, 77 MIT faculty members now hold NAS membership. The four MIT professors were among 84 members and 21 foreign associates from 15 countries elected to the NAS this year.</p>
<p>NAS membership is one of the highest honors afforded to scientists and engineers. Past members have included Albert Einstein, Thomas Edison, and Alexander Graham Bell; nearly 200 living NAS members have earned Nobel Prizes.</p>
<p>The NAS, when founded in 1863, called upon a group of scholars to “investigate, examine, experiment, and report upon any subject of science or art” whenever requested by the U.S. government. There are currently 2,214 active NAS members and 444 foreign associates.</p>
<p><strong>Daron Acemoglu</strong></p>
<p>Acemoglu’s research centers on political economy; economic development and growth; human capital theory; growth theory; innovation; search theory; network economics; and learning. He has written three books and numerous journal articles. He is the co-author, with James Robinson, of “Why Nations Fail: The Origins of Power, Prosperity, and Poverty” (Crown Publishers, 2012), which asserts that manmade political and economic institutions determine economic success or failure. “Why Nations Fail” won the George S. Eccles Award for Excellence in Writing in 2013.</p>
<p>Among a long list of awards, Acemoglu received the Erwin Plein Nemmers Prize for achievement and work of lasting significance in the field of economics in 2007. He was the 2005 winner of the John Bates Clark Medal, which is bestowed on economists under 40 who have made the most significant contribution to economic thought and knowledge.</p>
<p>Acemoglu holds a Ph.D. from the London School of Economics and has been a member of the MIT faculty since 1993. He is the editor-in-chief of <em>Econometrica</em>, a publication of the Econometric Society, and a member of the Institutions, Organizations, and Growth Program of the Canadian Institute of Advanced Research. He is a research associate of the National Bureau of Economic Research and a research fellow of the Centre for Economic Policy Research. In the past, Acemoglu has served on the executive committee of the American Economic Society and as chair of the nominating committee of the American Academy of Arts and Sciences.</p>
<p><strong>Emery Brown</strong></p>
<p>Brown is the Edward Hood Taplin Professor of Medical Engineering and professor of computational neuroscience, as well as the Warren M. Zapol Professor of Anesthesia at Harvard Medical School and Massachusetts General Hospital. He is an anesthesiologist-statistician whose statistics research focuses on the development of signal-processing algorithms to characterize how the patterns of electrical discharges from neurons in the brain represent information from the outside world. By using a wide array of methods in interdisciplinary collaborations with investigators from several institutions, Brown has made important contributions in his experimental research toward understanding the neuroscience of how anesthetic drugs act in the brain to create the states of general anesthesia.</p>
<p>Brown received his AB, AM, and PhD at Harvard, as well as an MD at Harvard Medical School. He currently serves on the NIH BRAIN Initiative working group. Brown is a fellow or elected member of several prestigious academic societies, including the Institute of Medicine of the National Academies, the American Academy of Arts and Sciences, and the American Association for the Advancement of Science. His previous awards include the Jerome Sack Award for Cross Disciplinary Research from National Institute of Statistical Science in 2011, an NIH Director’s Pioneer Award in 2007, and an NIH Director’s Transformative Research Award in 2012.</p>
<p><strong>Alan Grossman</strong></p>
<p>Grossman, the Praecis Professor of Biology and associate head of the Department of Biology, combines genetic, molecular, physiological, biochemical, cell-biological, and genomic approaches to study how bacteria sense internal and external conditions, and control basic cellular processes in response to these conditions. Focused on the organism Bacillus subtilis, Grossman’s research seeks to define signals that are sensed; characterize signal transduction and regulatory outputs; and study mechanisms controlling cell-cell signaling, gene expression, development, DNA replication, chromosome dynamics, and horizontal gene transfer.</p>
<p>Grossman received a BA in biochemistry from Brown University in 1979, followed by a PhD in molecular biology from the University of Wisconsin at Madison in 1984.&nbsp;&nbsp; After a postdoctoral fellowship in the Department of Cellular and Developmental Biology at Harvard University, Grossman joined MIT’s Department of Biology in 1988. He received a life-saving heart transplant in 2006. He is a fellow of the American Academy of Arts and Sciences.</p>
<p><strong>Timothy Grove</strong></p>
<p>Grove’s research focus is on the processes that have led to the chemical differentiation of the crust and mantle of the Earth and on the processes of formation and evolution of the interiors of other planets, including the moon, Mars, and meteorite parent bodies. Combining geology, geophysics, and geochemistry to interpret the thermal histories of geologic materials, his group studies magma-generation processes; crystal growth and nucleation; phase transitions in minerals; diffusion in crystalline solids and silicate melts; and the time dependence of diffusion-controlled processes.</p>
<p>Grove holds a Ph.D. from Harvard University (1976) and has been a professor at MIT since 1979. He is a member of the American Academy of Arts and Sciences, a fellow of the Minerological Society of America and of the American Geophysical Union, and is the recipient of the 2014 Goldschmidt Award of the Geochemical Society. He was the president of the American Geophysical Union from 2008 to 2010. He is the executive editor for <em>Contributions to Minerology and Petrology</em>.</p>
<p>Grove’s award brings to 10 the tally of National Academy members within MIT’s Department of Earth, Atmospheric and Planetary Sciences. He joins professors Ed Boyle (2008), Clark Burchfiel (1984), Kerry Emanuel (2007), Richard Lindzen (1977), Gordon Petengill (1979), Susan Solomon (1992), Jack Wisdom (2008), Carl Wunsch (1978), and Maria Zuber (2004).&nbsp;</p>
Awards, honors and fellowships, Faculty, Research, National Academy of Sciences (NAS), Economics, Biology, Earth and Planetary Science, Earth and atmospheric sciences, Brain and cognitive sciencesHow a health care plan quickly lowered infant mortality http://newsoffice.mit.edu/2014/how-health-care-plan-quickly-lowered-infant-mortality-0430
Study: Improved hospital access lowered infant death rate among Thailand’s poor within a year.Wed, 30 Apr 2014 00:00:04 -0400Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2014/how-health-care-plan-quickly-lowered-infant-mortality-0430<p>Few problems in developing countries are as gut-wrenching as high infant mortality — and yet it is a problem that has solutions. A policy change in Thailand’s health care system has quickly led to significantly lower infant mortality rates among less-wealthy citizens, as a study co-authored by MIT economists shows.</p>
<p>“It’s a very dramatic shift,” says Robert Townsend, the Elizabeth and James Killian Professor of Economics at MIT, and a co-author of a new paper outlining the findings<em>.</em> The study was conducted along with Jon Gruber, an MIT professor of economics and health care expert, and Nathaniel Hendren, an economist at Harvard University.</p>
<p>The researchers found that Thailand’s “30 Baht” program, which increased access to hospitals, led to a 13 percent drop in infant mortality in about a year. That change seems largely attributable to fewer infant deaths in rural areas, where previously the poor might never have entered hospitals to seek care.</p>
<p>The paper, “The Great Equalizer: Health Care Access and Infant Mortality in Thailand,” recently published in the <em>American Economic Journal: Applied Economics. </em></p>
<p><strong>The big impact of small copays</strong></p>
<p>Instituted in 2001, Thailand’s 30 Baht program altered health care arrangements in several ways. It provided for funds of about $35 per capita to be granted to provincial hospitals, based on the numbers of local residents, and lowered copays to 30 Thai baht, or about 75 cents, per visit. Previously, about 30 percent of Thailand’s population had been enrolled in a modestly funded health care program, the Medical Welfare Scheme (MWS), while another 50 percent of the population was too well-off for MWS, but not well-off enough to have other insurance.</p>
<p>The study was based on data from a health and welfare survey in Thailand covering years from 2001 to 2005, and consisted of a cross-section of the population in all 76 Thai provinces.</p>
<p>The people most affected by the policy change included those previously enrolled in MWS, which was replaced by the 30 Baht program; moreover, the study found, hospital utilization increased most for women ages 20 to 30 and for infants. In conjunction with this, the decrease in infant mortality was a striking medical outcome stemming from the greater access to hospitals.</p>
<p>“One of the most surprising things about the results is how quickly you see the shift in infant mortality,” Hendren says. “You see it within a year. It’s well known that a lot of the causes of infant mortality are caused by very preventable things, such as dehydration.” Infants with diarrhea, for instance, can become dehydrated; other treatable causes of infant death in the developing world, as studies show, include pneumonia and infection.</p>
<p>The 30 Baht program lowered infant deaths by about 2 per 1,000 births in Thailand over the course of the study; previously, the national rate may have been around 15 per 1,000 births, according to the World Bank’s World Development Indicators.</p>
<p><strong>High-visibility program</strong></p>
<p>To be sure, the 30 Baht program was not strictly designed to combat infant mortality alone; its goal has been to increase health care access for all. For that reason, the researchers note, the visibility of the program seems to have helped save lives, in part, by letting more people recognize they have a right to hospital access.</p>
<p>“It’s hard to find somebody who doesn’t know about the 30 Baht program, in the more rural areas,” Hendren says. For hospitals, he adds, “You get the sense there was this greater ability to expand their reach into the community.”</p>
<p>Other scholars say the study’s results are interesting and suggest additional issues for scholarly investigation.</p>
<p>“I think it’s a good-news paper,” says Glenn Melnick, a professor at the University of Southern California who focuses on health economics and finance, and who has previously studied the 30 Baht program. The visibility of the program, Melnick agrees, has likely helped direct people in rural areas to hospitals: “A lot of the time, people don't know what to do” about locating health care providers, he observes. Still, Melnick suggests, there are lingering questions about whether the Thai program can support more expensive forms of care over the long term.</p>
<p>As Townsend notes, plenty of research questions remain about how the operations of hospitals have changed since the implementation of the 30 Baht program.</p>
<p>“If we could, we would try to know more about the delivery mechanism of health care within the hospitals, how they allocate care and treatment depending on the patients,” Townsend says.</p>
Thailand’s “30 Baht” program, which increased access to hospitals, has led to a 13 percent drop in infant mortality in about a year. That change seems largely attributable to fewer infant deaths in rural areas, where previously the poor might never have entered hospitals to seek care. Economics, Health care, Thailand, Development economics, Infant mortalitySeven faculty members elected to the American Academy of Arts and Scienceshttp://newsoffice.mit.edu/2014/seven-faculty-members-elected-american-academy-arts-and-sciences
Among 204 elected this year to the prestigious honorary society.Wed, 23 Apr 2014 17:00:00 -0400News Officehttp://newsoffice.mit.edu/2014/seven-faculty-members-elected-american-academy-arts-and-sciences<p>Seven MIT faculty members are among 204 leaders from academia, business, public affairs, the humanities and the arts elected to the American Academy of Arts and Sciences, the academy <a href="https://www.amacad.org/content/news/pressReleases.aspx?pr=217">announced today</a>.</p>
<p>One of the nation’s most prestigious honorary societies, the <a href="https://www.amacad.org/default.aspx">academy</a> is also a leading center for independent policy research. Members contribute to academy publications, as well as studies of science and technology policy, energy and global security, social policy and American institutions, the humanities and culture, and education.</p>
<p>Those elected from MIT this year are:</p>
<ul>
<li>Elazer Reuven Edelman, the Thomas D. and Virginia W. Cabot Professor of Health Sciences and Technology</li>
<li>Michael Greenstone, the 3M Professor of Environmental Economics</li>
<li>Keith Adam Nelson, a professor of chemistry</li>
<li>Paul A. Seidel, a professor of mathematics</li>
<li>Gigliola Staffilani, the Abby Rockefeller Mauzé Professor of Mathematics</li>
<li>Sherry Roxanne Turkle, the Abby Rockefeller Mauzé Professor of the Social Studies of Science and Technology</li>
<li>Robert Dirk van der Hilst, the Schlumberger Professor of Earth Sciences and head of the Department of Earth, Atmospheric and Planetary Sciences</li>
</ul>
<p>“It is a privilege to honor these men and women for their extraordinary individual accomplishments,” Don Randel, chair of the academy’s Board of Directors, said in a statement. “The knowledge and expertise of our members give the Academy a unique capacity — and responsibility — to provide practical policy solutions to the pressing challenges of the day. We look forward to engaging our new members in this work.”</p>
<p>The new class will be inducted at a ceremony held on Oct. 11 at the academy’s headquarters in Cambridge.</p>
<p>Since its founding in 1780, the academy has elected leading “thinkers and doers” from each generation, including George Washington and Benjamin Franklin in the 18th century, Daniel Webster and Ralph Waldo Emerson in the 19th century, and Albert Einstein and Winston Churchill in the 20th century. The current membership includes more than 250 Nobel laureates and more than 60 Pulitzer Prize winners.</p>
Faculty, Awards, honors and fellowships, AAAS, Health sciences and technology, Economics, Chemistry, Mathematics, science, Technology, Technology and society, Earth sciencesWhat’s the future of wealth — and inequality?http://newsoffice.mit.edu/2014/piketty-discusses-future-of-wealth-and-inequality-0422
At MIT, “rock star” economist Thomas Piketty presents, defends work on inequality.Tue, 22 Apr 2014 18:00:00 -0400Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2014/piketty-discusses-future-of-wealth-and-inequality-0422<p>For a couple of generations of Americans growing up after the Great Depression and World War II, it seemed normal that the middle class would command a stable share of a growing economic state: The slice of income gained by the top 10 percent of earners mostly held steady, at just under 35 percent, from the 1940s through the early 1980s.</p>
<p>But since then, inequality has risen: The top 10 percent of earners now accrue nearly half of the nation’s income, a level last seen in the 1920s. For Thomas Piketty, a scholar at the Paris School of Economics, we have re-entered “patrimonial capitalism,” in which inherited wealth, not work, begets further wealth.</p>
<p>Piketty’s book detailing this thesis, the unexpected bestseller “Capital in the 21st Century,” has made him, as <em>The New York Times</em> put it, a “rock star” among intellectuals. In a seminar talk on Friday at MIT, Piketty continued his efforts to cast economic history in a new light. The midcentury shift toward greater equality, when viewed against a few centuries of economic data compiled in Piketty’s book, looks more like an aberration, not the natural order of things.</p>
<p>“We are talking about a really deep trend,” Piketty said in his remarks at MIT. “Nobody knows how far this is going to go.”</p>
<p>Thus, he added, we should retool our policies if we want to have greater equality, rather than wait for a repeat of the postwar era: “There are good reasons to believe what happened in the 20th century was unusual,” Piketty added.</p>
<p><strong>Macroeconomics Seminar speaker No. 8</strong></p>
<p>Touring in the U.S. over the last week, Piketty has given large public lectures and met with Treasury Secretary Jacob Lew, the White House Council of Economic Advisors, and officials from both the Government Accountability Office and the International Monetary Fund.</p>
<p>But at MIT, Piketty presented his work in a rather different setting: the Institute’s Macroeconomics Seminar, a regular workshop in the Department of Economics where scholars present their research. The seminar is currently organized by Ivan Werning, the Robert M. Solow Professor of Economics at MIT.</p>
<p>The eighth speaker at the Macroeconomics Seminar this semester, Piketty presented his work and faced an array of questions about his assumptions and conclusions — which, in the longtime style of economics seminars, the audience freely tossed out in the middle of his remarks.</p>
<p>Piketty’s book contends that if the rate of return on accumulated capital significantly exceeds overall growth rates, it will lead to a greater concentration of wealth in the hands of those who already have significant assets. In that light, Piketty faced several queries about the varieties of capital and their relationship to growth.</p>
<p>One group of questions he faced related to the value of specifying the types of capital in question, with an eye to quantifying wealth-creation as precisely as possible. For instance, ever-scarcer land resources, one audience member noted, might appear more valuable over time, increasing the apparent value of that form of capital, even though the amount of production yielded by that land might not increase.</p>
<p>On a related note, other audience members queried whether Piketty’s general separation of the rate of return on capital, on the one hand, and growth, on the other, might preclude a more detailed analysis of the interactions between the two things.</p>
<p>On the former count, Piketty said he and his colleagues were continuing to study such price effects, but that they were accompanied by real capital accumulations; to the second point, he acknowledged that it is true that the rate of return and growth are intertwined, but stated that over time, globally, large-scale data show that they also diverge significantly. “I think it’s useful to look at aggregate data, [although] of course we recognize the limits of that kind of thinking,” Piketty said.</p>
<p>Piketty also discussed his preferred policy solution to growing inequality: higher tax rates on the wealthy. Over the last few decades, as he emphasized, those rates have fallen in many countries. Engineering a sustained reversal of this trend would seem to be unlikely, but Piketty argued that since high rates were once instituted, they could, perhaps, become reality again.</p>
<p>“In 1900, most people were saying progressive taxation would never happen,” Piketty said. He added that “the U.S. is really the country that invented extreme tax progressivity,” asserting that Germany’s famously high postwar income tax regime was a product of the American reconstruction of the country.</p>
<p><strong>Long and strong MIT ties</strong></p>
<p>Piketty has longstanding MIT ties: He was an assistant professor at the Institute from 1993 to 1995, and returned as a visiting professor in the 2000-2001 academic year. He has also co-authored articles with multiple MIT scholars.</p>
<p>His talk drew an audience of more than 100, including MIT faculty and students, scholars from other local universities, the consul general from the French consulate in Boston, and the translator of “Capital in the 21st Century,” Arthur Goldhammer, of Harvard University’s Center for European Studies.</p>
<p>Commenting on the book’s unexpected popularity, Goldhammer, an MIT alumnus who has become a leading translator of French academic works, suggested to <em>MIT News</em> that “the theme of inequality seems to resonate with widespread concerns about what has become of American society in recent years.”</p>
<p>Werning told <em>MIT News</em> that it was “fun and interesting to have Thomas over at MIT,” adding that Piketty “has written a very provocative book that will motivate a lot of follow-up research, as well as policy discussions, so it is important to have … research- oriented discussions” of the work.</p>
Economics, Macroeconomics, Wealth, Monetary policy, Inequality, Special events and guest speakers3 Questions: Michael Greenstone on the experimental method in environmental economicshttp://newsoffice.mit.edu/2014/3-questions-michael-greenstone-on-the-experimental-method-in-environmental-economics-0417
MIT economist makes the case for new quasi-experiments as a way of studying environmental issues.Thu, 17 Apr 2014 14:00:00 -0400Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2014/3-questions-michael-greenstone-on-the-experimental-method-in-environmental-economics-0417<p><em>How can scholars get traction on environmental problems, particularly those relating to pollution? In an essay appearing in this week’s issue of the journal </em>Science<em>, MIT economist Michael Greenstone, along with co-authors Francesca Dominici and Cass Sunstein of Harvard University, make the case for “quasi-experiments,” or “natural experiments,” which have gained prominence in other domains of the social sciences. Environmental economics, they suggest, can rely increasingly on quasi-experiments to sharpen its conclusions about which kinds of environmental action are most cost-effective. Greenstone sat down with </em>MIT News<em> to discuss the subject. </em></p>
<p><strong>Q.</strong> Why should quasi-experiments be in the environmental economics toolbox?</p>
<p><strong>A.</strong> The single best way to learn about the world is through randomized controlled trials (RCTs). Now, some problems are not directly amenable to RCTs. In the case of climate change, we don’t have a second planet to randomly assign climate change to, or not. And that means to learn about a lot of environmental problems, such as climate change or air quality, we have to turn to other methods.</p>
<p>The conventional approach to doing that has been to rely on comparisons of places that are more polluted to places that are less polluted. [But] places that are more polluted might have other things that are different about them, besides the pollution. In this paper we have highlighted a potential solution, the use of quasi-experimental evaluation techniques, which mimic some of the features of an experiment, in the sense that there is a group that receives the treatment and a [very similar] group that doesn’t. But [this] is based on nature or politics or some other accident, rather than being done through random assignment.</p>
<p>In the case of environmental questions, there has been great progress in the last 10 to 15 years applying quasi-experiments to environmental questions. This same revolution has been occurring in other fields — labor economics, development economics, public finance, statistics, and criminology. This “credibility revolution,” as some people refer to it, tries to move beyond simple comparisons.</p>
<p><strong>Q.</strong> What are some kinds of topics or findings that attest to the value of quasi-experiments in environmental economics?</p>
<p><strong>A.</strong> One is a comparison of what happened to air pollution-related diseases during the Beijing Olympics, when the Chinese government shut down, by fiat, many sources of air pollution. Others have been taking advantage of the way the Clean Air Act was implemented in the U.S., using places that were otherwise similar, some of which were regulated stringently and others were much less so, [and measuring] what happens to air quality, infant mortality rates, housing prices, and manufacturing activity in those places.</p>
<p>More recently I [co-authored] <a href="http://newsoffice.mit.edu/2013/study-estimates-extent-to-which-air-pollution-in-china-shortens-lives-0708">a paper</a> [with Yuyu Chen, Avraham Ebenstein, and Hongbin Li], on air pollution and life expectancy, by looking at a region in China where there were very large increases in particulate air pollution relative to otherwise seemingly similar places. If you go back to the planning period in China, they didn’t have enough money to heat all of China during the winter, so they implemented an arbitrary rule, which is often the hallmark of quasi-experiments. This arbitrary rule was that all places north of the Huai River were to receive free winter heating, largely derived from coal combustion, and in places to the south, no heating was allowed.</p>
<p>The first result of that paper is that there are dramatic differences in particulate air pollution [between the] north and south [sides] of the river, due to the Huai River heating policy. The second result is: That appears to be matched by sharp declines in life expectancy, just to the north of the river, and just to the south. If you were unfortunate enough to be an intended beneficiary of this policy, the consequences appear substantial: The people who live to the north have a life expectancy of about five years less than people just to the south. If you took those estimates literally, it would suggest the half a billion people in the north are losing 2.5 billion years of life expectancy, which is a staggering figure.</p>
<p>There is another remarkable thing about particulates that motivated us to write the <em>Science</em> paper: We just went back into old [Office of Management and Budget] reports on the benefits of regulation, and somewhere between one-third and one-half of all benefits from all regulations come from the regulation of pollution — and one [form of] air pollution in particular, particulates in air pollution.</p>
<p><strong>Q.</strong> When we talk about cost-benefits analyses regarding health, it can create trepidation among those who think focusing on limiting costs may lead to less emphasis on benefits. Quasi-experiments may be sharper tools, but are they also policy-neutral in this sense?</p>
<p><strong>A.</strong> Let’s start with the [opposite] case, where we rule out quantitative analysis as being too easily politicized. I think what happens in that vacuum is that people with vested interests rush in. And by definition they do not have the welfare of the full country at heart; they have the welfare of the interest groups or businesses they’re running or representing, be they pro-environment or anti-environment. And I think quantification is absolutely central to being able to constrain those arguments. There is no question that quantification can be abused like anything else can be abused. But I think the role of the university and the academy is to put out, as best they can, credible answers, and what I have observed in the political process is that high-level academic research does not always drive policy decisions, but it puts bounds on the policy discussion. Those bounds constrain the policy decisions to a region around the best evidence. And that can be very valuable.</p>
Michael GreenstoneEnvironment, Economics, Pollution, Health, Public health, Experiments, 3 QuestionsOne currency, one price?http://newsoffice.mit.edu/2014/one-currency-one-price
New study shows the Euro leading to uniform prices across countries.Tue, 01 Apr 2014 00:00:02 -0400Peter Dizikes | MIT News Officehttp://newsoffice.mit.edu/2014/one-currency-one-price<p>Economics has a “law of one price,” which states that identical goods should, in theory, sell for identical prices —&nbsp;or else markets will even out the differences. Empirical work on the topic, however, has produced little evidence in support of this “law,” and many studies showing deviations from it.</p>
<p>Now a newly published paper co-authored by two MIT economists, along with a colleague from the University of Chicago, presents evidence of a strong convergence of prices within the Eurozone, the region of European countries sharing a common currency. The divergence of product prices is 30 to 50 percent lower in Eurozone countries than it is even in neighboring countries whose currencies are pegged to the Euro.</p>
<p>“What is surprising about our paper is that we found the law of one price,” says Roberto Rigobon, the Society of Sloan Fellows Professor of Management at the MIT Sloan School of Management, and a co-author of the paper, “and we found it to be very strongly dependent on the currency in which the prices are quoted.”</p>
<p>Indeed, the unity of the currency seems to be a more powerful factor in determining prices than the characteristics of particular countries or consumers.</p>
<p>“Economists tend to think what drives international price differences are things like transportation costs, information costs, tariffs, cultural differences, and other factors,” says Alberto Cavallo, a professor at MIT Sloan, and another co-author of the paper. “We’re finding those things don’t seem to matter relative to the retailer showing prices in the same currency.”</p>
<p>The paper, “Currency Unions, Product Introductions, and the Real Exchange Rate,” is being published by the <em>Quarterly Journal of Economics</em>. Along with Cavallo and Rigobon, the study was conducted by Brent Neiman, a professor at the University of Chicago’s Booth School of Business.</p>
<p><strong>From Apple to Zara</strong></p>
<p>The study covers prices of thousands of products, drawing on data from four major international firms: Apple, H&amp;M, Ikea, and Zara. Online pricing data was “scraped” using a harvesting technique that Rigobon and Cavallo first developed for the “Billion Prices Project,” which provides real-time inflation estimates. All told, the researchers examined nearly 120,000 products sold in 85 countries from October 2008 to May 2013.</p>
<p>The researchers checked online and in-store prices against each other, finding no significant divergences. Moreover, because the study dealt with international firms that often produce all their goods in a single location and then use similar logistical systems to distribute the goods, the variation in prices observed in non-Euro countries most likely does not come from variations in production and distribution.</p>
<p>In evaluating the law of one price, Rigobon observes, “One question has been, can you find the same item delivered to the consumer in the exact same way with the exact same retailer, with the exact same procedures? We realized that we had those identical items.”</p>
<p>More evidence for the idea that the common currency drives identical pricing is that in countries like Denmark, which do not use the Euro but peg their currencies to it, prices diverge markedly from nearby Eurozone countries. The same holds for countries that do not use the U.S. dollar, but peg their own currencies to it.</p>
<p>“When we look at countries that do not use the same currency but are pegged, we still find an enormous amount of dispersion,” Cavallo says. “That points to the fact it’s not the flexibility or rigidity of the exchange rate that explains the differences.”</p>
<p>The research also uncovered nuances in pricing strategies. For one thing, international firms take country-specific taxes into account when setting prices, so that the pretax price in France, which has a relatively high Value-Added Tax (VAT), will be lower than in other countries. After taxes, however, the prices shown to consumers are uniform.</p>
<p>One explanation for the price convergence, the researchers suggest, is consumer psychology, shaped by access to prices online: People who can see prices from country to country across the Eurozone would consider it unfair if those prices diverged.</p>
<p>“That’s possibly driving this,” Cavallo says. “Or it could be that these firms just think about their pricing just in terms of currencies.”</p>
<p><strong>The politics of pricing</strong></p>
<p>Whatever the benefits or flaws of the Eurozone, the research indicates that the common currency is delivering on one of the stated aims of its backers: a more unified pricing system in Europe.&nbsp;</p>
<p>However, as the researchers point out, unified pricing is a double-edged sword: Relatively well-off consumers in some European countries may gain when prices equalize. But in a place such as Greece, currently suffering a severe recession with deep wage reductions, unified Eurozone pricing reduces consumers’ purchasing power.</p>
<p>“The companies are pricing Greece and Germany as if they are two neighborhoods of the same city,” Rigobon says, adding: “Having one currency means implicitly that in good times, you are buying the price stability of Germany. But that also means that in bad times, unfortunately, you are buying the price stability of Germany.”</p>
<p>The study has already attracted considerable attention among economists. Gita Gopinath, an economics professor at Harvard University, calls the work “a terrific paper” that adds new information to the field. “What we did not know, and what this paper shows, is that even when the volatility of the exchange rate is down to zero, it matters a lot if this zero volatility has to do with countries being in a currency union, versus if it is because of a fixed exchange rate,” Gopinath says. However, she adds, the precise mechanism at work remains unclear: “This striking finding is something we need to understand better.”</p>
<p>Cavallo, Rigobon, and Neiman take the same view in the paper. “Future work should focus on understanding what determines when prices behave like those documented here and when they do not,” they write. They would also like to collect more data illuminating how companies set prices when new goods are first introduced.</p>
<p>The researchers are already pursuing follow-up studies: For instance, with the entrance of Latvia to the Eurozone, they are now comparing how that change in currency has affected prices in Latvia.</p>
Economics, Consumers, Prices, InflationLogistics clusters: An alternative path to economic successhttp://newsoffice.mit.edu/2014/logistics-clusters-an-alternative-path-to-economic-success
Yossi Sheffi explores how distribution centers can spur economic growth and innovation.Wed, 05 Mar 2014 14:30:00 -0500Eric Brown | MIT Industrial Liaison Programhttp://newsoffice.mit.edu/2014/logistics-clusters-an-alternative-path-to-economic-successRegions and countries around the world are competing fiercely to hold on to factories while incubating new, high-tech industries. Yet, for many, there may be a more sustainable path to success: becoming a logistics center for transportation and distribution.<br /><br />In "Logistics Clusters: Delivering Value and Driving Growth" (MIT Press, 2012), MIT professor Yossi Sheffi explains how distribution centers are becoming much more than the places where goods are unloaded from boats and planes onto trucks and trains. With some government help, they often evolve into thriving sources of innovation.<br /><br />"Like other clusters, logistics clusters enable tacit information exchange between companies and attract specialized labor and supplies, thereby improving efficiency and competition and making it easier to start new companies," says Sheffi, director of <a href="http://ctl.mit.edu/" target="_blank">MIT's Center for Transportation &amp; Logistics (CTL)</a>. "Yet logistics clusters have many additional benefits." These include low transportation costs, a high transportation service level, and a broad, stable base of non-offshoreable regional jobs, Sheffi says, as well as a wide range of complementary economic activity in repairs, maintenance, packaging, and manufacturing.<br /><br />Sheffi’s best-selling book The Resilient Enterprise (MIT Press, 2005) offered strategies for responding to major disruptions to industrial operations and supply chains. He's now working on a major update that offers more insights into the proper role of government in responding to disruption, as well as risk-management lessons from Hurricane Katrina, Hurricane Sandy, and other natural disasters. Other recent projects include research into sustainable supply chains and the challenge of estimating carbon footprint across the supply chain.<br /><br /><strong>Broad-based job creation</strong><br /><br />Logistics operations agglomerate in certain cities or regions to take advantage of geography, but also to enjoy the benefits that quickly arise from consolidation. "With clusters, transportation companies can deploy larger airplanes, trucks, and trains, thereby bringing down costs," says Sheffi, the Elisha Gray II Professor of Engineering Systems at MIT. "As more companies join the cluster, the level of service provided by the transportation carriers goes up. There's a higher frequency of service, and more service to further locations."<br /><br />As Sheffi expected when he began his research, all of this adds up to company and job creation. Yet he also discovered that logistics clusters improve economic growth over a broader economic spectrum than do high-tech and innovation clusters like Wall Street, Hollywood, and Silicon Valley. "The average salaries in the logistics industry are similar to those in manufacturing, and they help people at the bottom of the ladder, not just highly trained experts and engineers," Sheffi says. "In logistics, it is common for people to start out by moving boxes and driving trucks and forklifts, and end up in senior management."<br /><br />The working-class nature of the industry is reflected in the executive suite. "In distribution companies like UPS, the lion's share of top executives started on the floor," Sheffi says. "People tend to stay within the industry, so it has an element of moving people out of menial jobs to the middle class."<br /><br />Logistics jobs have the further advantage of stability, Sheffi says. They are not being replaced by automation as quickly as manufacturing jobs, and they are far less likely to move overseas. "Logistics jobs are not offshoreable," Sheffi says. "These clusters have to be placed close to the last mile to the retailers."<br /><br />Another benefit of logistics clusters is that they generate new jobs beyond logistics. As freight is distributed through these hubs, "you have people handling repair, maintenance, tagging, packaging — a whole range of activities," Sheffi says. For example, to speed laptop repairs, Flextronics placed its repair center right outside Memphis International Airport and the FedEx SuperHub.<br /><br />Other jobs emerge that are even farther afield. "For processing incoming medical supplies, you'll need pharmacists on site," Sheffi says. "And Zappos has dozens of videographers in their Louisville cluster because they need a high-impact video of every shoe that comes through their center."<br /><br />In many cases, manufacturers set up operations near logistics clusters to exploit reduced time and high level of transportation service, Sheffi says. He cites Indianapolis as a logistics cluster that evolved into a manufacturing subcluster.<br /><br />In the U.S. right now, the high cost of fuel has encouraged the siting of manufacturing facilities near logistics clusters. 3-D printing and product customization also favor placing manufacturing closer to the edges of the distribution network. (These issues are detailed by CTL Executive Director <a href="http://ilp.mit.edu/newsstory.jsp?id=19701" target="_blank">Chris Caplice</a> in a recent ILP Industry Insider profile, which also provides an overview of CTL activities.)<br /><br /><strong>Beyond geography: The keys to a thriving cluster</strong><br /><br />Geography is important in establishing a successful logistics cluster, but it's not the whole story. "Most logistics clusters are located at the intersection of a number of different shipping routes, but geography itself does not make it preordained," Sheffi says. "There are places that should have become logistics clusters but did not. Port Said, at the mouth of the Suez Canal, sees thousands of ships pass by every year, but they don't stop. Port Said could have been the major point of distribution for much of Europe, but the Egyptians didn't get their act together."<br /><br />On the other hand, Sheffi says, the Spanish city of Zaragoza hosts the largest logistics park in Europe, yet it is “a small city, with no big airport, and it doesn't even lie next to a port," Sheffi says. Despite these handicaps, the city was on its way to becoming a logistics success a little over a decade ago when Sheffi first visited to give a major speech. Under Sheffi's direction, MIT's Center for Transportation &amp; Logistics chose Zaragoza as a location for one of the first research and education centers in its Global SCALE (Supply Chain and Logistics Excellence) Network, dedicated to the development of supply chain and logistics excellence through innovation. The CTL supply chain research has furthered Zaragoza's logistics success.<br /><br />Intrigued by how this relative backwater rose to the top of the supply chain, Sheffi set about exploring what Zaragoza and other successful "super clusters" such as Rotterdam, Singapore, Miami, Memphis, and Los Angeles had in common. Although most of the successful clusters enjoyed geographic benefits, he found that they also had other advantages, such as a strong communications infrastructure, capable financial services, and a stable, supportive government. In particular, a strong public-private partnership was key to the Zaragoza story.<br /><br />"Government investment in physical infrastructure, free trade zones, trade policies, land zoning, and a general good business climate are common to all the best clusters," Sheffi says. "The regions also need the right culture. A history and culture of trading is helpful; for example, it's very hard to be a logistics cluster in a place that does not accept immigration. Logistics involves people from around the world."Yossi SheffiLogistics, Economics, Supply chainsThe dark and stormy side of science-policy mixologyhttp://newsoffice.mit.edu/2014/the-dark-and-stormy-of-science-policy-mixology
IAP course explored the science, economics, and policy of climate change.Tue, 11 Feb 2014 18:00:00 -0500Daniel Rothenberg, Daniel Gilford, Michael Davidson, and Arthur Yip | Joint Program on the Science and Policy of Global Changehttp://newsoffice.mit.edu/2014/the-dark-and-stormy-of-science-policy-mixologyClimate-change policy is inextricably linked to science, but the complexity of modeling Earth’s systems feeds into an imperfect policy process that often warps ideal economic instruments beyond recognition. In IAP 2014, the MIT Joint Program on the Science and Policy of Global Change continued a tradition of presenting to the MIT community the basics (and some of the nuance) of this complex issue over a two-session course. <br /><br />While the minutiae of a three-dimensional atmosphere and ocean model may be daunting (and require clusters of networked high-performance computers to complete a run), much can be understood about climate change from simplified models that build on basic physics accessible to any first-year undergraduate. Fundamental principles, such as energy balance, yield straightforward arguments about why Earth should warm as we add greenhouse gases to its atmosphere. Those principles can be used to frame simple predictions about how future warming might proceed — information that policymakers and analysts can use to help plan for the future.<br /><br />Considering climate change as an externality — a cost imposed on society by individuals and companies without compensation — economists have developed theories for reducing environmental impacts by appealing to pocketbooks. Putting a price on pollution (e.g., carbon tax) or selling and trading “rights” to pollute (e.g., cap-and-trade) are two common policy levers to encourage polluters to cut back while mitigating overall economic impact. Coupling global climate models with global economic models (collectively, the <a href="http://globalchange.mit.edu/research/IGSM" target="_blank">Integrated Global System Modeling framework – IGSM</a>) illuminates the complex interactions between human activities and Earth system changes.<br /><br />But which is better — tax, or trade? From a strictly economic standpoint, if we have perfect information on the damages from climate change and the costs required to mitigate, the two should be equivalent. However, given the uncertainties on both ends of the human-Earth interaction, the answer from a strictly modeling perspective depends on which can be better estimated: the social cost of carbon (the total cost to society of the externality) or the “tipping point” thresholds of irreversible climate change. This is an area of ongoing research.<br /><br />Policymakers tend to respond to what they can see, an important part of the policy-science nexus of climate change. Typhoon Haiyan, which devastated the Philippines last November, provided a stark reminder of the human suffering that can result from extreme weather events — as did hurricanes Sandy and Katrina on the domestic front. Hitting land just as the annual United Nations climate talks opened in Poland, Haiyan (or Yolanda, in the Philippines) spurred international efforts there to create the beginnings of a “Warsaw Mechanism,” an international compensation scheme for loss and damage resulting from climate change. Predicting how the frequency and severity of such storms will change in a warming world is a crucial research focus, particularly as humans build more densely along coasts and in floodplains and expose themselves to more potential economic and personal loss.<br /><br />Ultimately, no policy issue exists in a vacuum. Examples of current efforts in the U.S., China, and the European Union to reduce greenhouse gas emissions make clear how rare it is for policy to capture the best of both science and economics. Politics strongly influence where the needle lands — tax, trade, or other — indicating an even bigger challenge that lies before us, not as scientists, but as citizens.<br /><br />
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<p class="shass">Daniel Rothenberg and Daniel Gilford are graduate students in MIT’s Department of Earth and Planetary Sciences<br />Michael Davidson and Arthur Yip are graduate students in MIT’s Engineering Systems Division</p>Daniel Gilford teaches about global change science.Climate change, Economics, Hurricanes, PolicyMapping the New York fashion scene, minute by minutehttp://newsoffice.mit.edu/2014/mapping-the-new-york-fashion-scene-minute-by-minute-0205
A new study uses social media to show how New York’s fashion industry still centers on just a few blocks of Manhattan.Wed, 05 Feb 2014 22:00:00 -0500Scott Campbell, School of Architecture and Planninghttp://newsoffice.mit.edu/2014/mapping-the-new-york-fashion-scene-minute-by-minute-0205A new study shows New York fashion designers don’t just flock to trends: They also do nearly all their business within the confines of the city’s historic Garment District.<br /><br />Study co-authors Sarah Williams of MIT’s Department of Urban Studies and Planning and Elizabeth Currid-Halkett of the University of Southern California’s Price School of Public Policy used the social networking app Foursquare to track the movements of fashion workers at apparel firms in the New York metropolitan area over a two-week period — an unprecedented use of social media and smartphones for such research. <br /><br />Their study, published today in the journal <i>PLoS ONE</i>, bears on the larger issue of proximity in urban economies, and suggests that having clusters of firms remains essential to economic activity — whether in New York or in rebuilding cities such as Detroit and Buffalo.<br /><br />The study’s authors found that 77 percent of all trips made by fashion designers across the region, and 80 percent of business-related trips, were logged within the boundaries of the Garment District, showing the important role of the district in the production of their products.<br /><br />“Previous research has argued that proximity matters, using interviews and empirical research as evidence, but this study is the first where we were able to track where the workers were going in real-time,” says Williams, who is the Ford Career Development Assistant Professor of Urban Studies at MIT. “The result was a minute-to-minute account of the interworking of the industry.”<br /><br />As New York’s Fashion Week kicks off, the research is particularly relevant as the city’s fashion industry takes center stage. <br /><br />“You’re not just preserving eight blocks of Manhattan, nor is this some romantic throwback to the city’s history,” says Currid-Halkett, an associate professor of public policy at USC. “Even in the 21st century, the benefits that we thought might be most exclusive to those in the Garment District actually spill over much more than we think across the metropolitan region, and on a daily basis. As cities, we should take these districts very seriously and invest in them as a very viable and impactful economic development and competitive advantage.”<br /><br />The study shows that space still matters, the researchers say. Economic clusters have long been shown to offer businesses economies of scale and scope; the benefit of creative synergies; shared resources and up-to-the-minute awareness of industry innovations; and intimate knowledge of competitors’ efforts. But some have argued that the rise of telecommuting diminishes the need for physical proximity and that industrial clusters like the Garment District — an area of prime real estate with protective zoning — should be relocated or even dispersed, especially given the decline of apparel manufacturing in the United States. <br /><br />“Williams and Currid-Halkett use data from the very technology that is often said to bring about the ‘death of distance’ to show that distance and proximity — being together — still matter for the most innovative parts of the economy,” says Michael Storper, a professor of economic geography at the London School of Economics and professor of urban planning at the University of California at Los Angeles. “They are pioneering the use of new forms of data to peer into the inner workings of the economies of cities today.”<br /><br />Partial funding for the research was provided by the Rockefeller Foundation.Shown here are the apparel firm locations and tracked movements of fashion workers in the New York metropolitan area over a two-week period. Cities, Design, Economics, Policy, Urban studies and planning, Social mediaHow ‘dark pools’ can help public stock marketshttp://newsoffice.mit.edu/2014/how-dark-pools-can-help-public-stock-markets-0203
New paper suggests private exchanges actually increase the ratio of well-informed investors participating in public markets.Mon, 03 Feb 2014 05:00:00 -0500Peter Dizikes, MIT News Officehttp://newsoffice.mit.edu/2014/how-dark-pools-can-help-public-stock-markets-0203<p>A “dark pool” may sound like a mysterious water source or an untapped oil well. In reality, it’s a finance term: Dark pools are privately run stock markets that do not show participants’ orders to the public before trades happen. They are a growing presence in stock trading, now representing at least one-eighth, and possibly much more, of all stock trading volume in the U.S.<br />
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But what is the effect of dark pools on “price discovery” — that is, the ongoing setting of prices on markets, which is thought to benefit from the transparency provided by public exchanges? At least one survey has shown that a clear majority of finance professionals — 71 percent — think dark pools are “somewhat” or “very” problematic in establishing stock prices.<br />
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But a new paper by an MIT professor, to be published in the <i>Review of Financial Studies</i>, asserts that this is not necessarily the case. Dark pools, it says, can actually help price discovery in the right circumstances. They do this, in part, by attracting less-informed traders, while better-informed traders — who may place a premium on acting quickly to execute trades — may be unable to fill their orders in smaller dark pools, and head back to the public exchanges to do business.<br />
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“The dark pool is like a screening device that siphons off uninformed traders,” says Haoxiang Zhu, a financial economist at the MIT Sloan School of Management, the author of the new paper. “In the end, on the [public] exchange, you get left with a higher concentration of the informed traders who contribute to price discovery.”<br />
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<strong>Not enough liquid in the pools</strong><br />
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Dark pools are believed to have originated in the 1980s, but have gained much more traction in the last half-decade. A 2009 study by the Securities and Exchange Commission estimated that 32 such dark pools, some run by prominent financial firms, represented about 8 percent of stock trades; a consulting firm, the Tabb Group, and a brokerage, Rosenblatt Securities, estimated in 2011 that dark pools handle 12 percent of U.S. trading volume. Along with that growth has come concerns about transparency problems in the markets.<br />
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“The usual intuition is that dark pools harm price discovery in the public venues, because people who have information [might] go hide in the dark,” Zhu observes.<br />
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For investors, the appeal of trading in a dark pool is the ability to make transactions without moving the market. Consider a well-informed investor with good information about firms — say a large institutional investor, such as a mutual fund. Suppose such an investor is buying some of its shares in a public company. Doing so in a dark pool might be appealing, because buying those shares in a public exchange might create an impact on the price that would makes executing the investor’s remaining orders more costly.<br />
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However, Zhu’s paper, based on a model of trading behavior, implies that the risk for investors of not being able to execute transactions in dark pools is a principal factor limiting the harm they might do to price discovery on public exchanges. To see why, consider that Zhu’s model includes both well-informed investors, acting on the basis of detailed knowledge about a stock, and as well as less-informed investors — trading due to, say, a need to rebalance a portfolio.<br />
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Now, if multiple well-informed investors arrive at the same conclusion about a company’s stock — say, that the firm’s quarterly earnings will rise and that buying is a good idea — they will rush to the dark pools to attempt trades. But many of those smart investors will discover liquidity problems in the dark pool: They crowd on one side of the market, and there may not be enough underinformed investors willing to take the other side of the trade. Needing to execute the trade promptly, the well-informed investors hurry back to the public stock exchanges in a greater proportion than the less-informed traders.<br />
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“If [well-informed traders] do not get their orders filled, their information becomes stale,” Zhu says.<br />
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The aggregate information generating price discovery on the public stock exchanges will thus be more accurate on average when dark pools are part of the process.<br />
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“It is basically a signal-to-noise argument,” Zhu says.<br />
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<strong>Making models and seeking facts</strong><br />
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To be clear, Zhu’s paper is based on a model of investor behavior. He also provides some caveats about his findings: For example, if dark pools use opaque rules, well-informed investors may not rush back to public exchanges as quickly. Moreover, better price discovery can coincide with worse liquidity, in the form of wider bid-ask spreads and higher price impacts on exchanges.<br />
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Still, as he notes, “Modeling forces us to have discipline in interpreting the data.”<br />
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Other scholars say the work yields valuable insights about the potential effects of investor behavior.<br />
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“I think he’s captured the essence of these dark pools,” says Charles Jones, a professor of finance and economics at Columbia University who has conducted extensive empirical research on investor knowledge and behavior. Such finance models, Jones adds, “really help set up hypotheses” for future empirical testing.<br />
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Maureen O’Hara, a professor of finance at Cornell University, says that Zhu’s paper “makes a real contribution by highlighting that dark pools can improve market performance, and not degrade it as has been suggested by some. His research agenda going forward will provide important insights into these market structure issues.”<br />
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Currently Zhu is at work on two additional research papers about dark pools — one theoretical, and another empirical. The theoretical study models dark-pool trading with large sizes of trades; the empirical study aims to evaluate the relationship between dark pools and high-frequency computerized trading.</p>
Finance, Stock Market, Economics, InvestingKenya under the microscopehttp://newsoffice.mit.edu/2014/kenya-under-the-microscope-0129
MIT economist Tavneet Suri explores finance, agriculture and even politics in her homeland of Kenya — and elsewhere in Africa.Wed, 29 Jan 2014 05:00:00 -0500Peter Dizikes, MIT News Officehttp://newsoffice.mit.edu/2014/kenya-under-the-microscope-0129<p>Occasionally, parents really do know best: When Tavneet Suri first started taking economics as a middle-school student in Nairobi, Kenya, she disliked it. But her father would not let her drop the course.<br />
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“I don’t care if you get a C,” she recalls him saying. “It’s good for you to try new things.”&nbsp;<br />
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How right he was: Suri took the course, did well, and by high school, “Economics was my favorite subject.” Today, she is an accomplished development economist at the MIT Sloan School of Management whose intensive, on-the-ground studies have produced significant findings about Kenya’s economy and politics.<br />
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Suri, who was granted tenure earlier this year, conducts three main strands of research. The best-known concerns the use of M-PESA, a text-based “mobile money” system that lets Kenyans borrow and share risk with others more easily, smoothing out income fluctuations in a heavily agricultural society.</p>
<p>Suri has also conducted extensive studies of economic development in African countries including Ghana, Rwanda, and Sierra Leone, often focusing on the adoption of agricultural technologies. And as part of her rapidly expanding research portfolio, Suri is now delving into political issues, including research on ethnic favoritism in politics and an ambitious, large-scale study of voter participation in Kenya’s new electoral system.<br />
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That current work may be a departure from her previous studies in applied economics, but also serves as a reminder that, indeed, it’s good to try new things.<br />
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<strong>‘Destiny’ was MIT</strong><br />
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Kenya, like some other East African countries, has had a South Asian community since the time of British colonial rule. Suri is a fourth-generation Kenyan: Her great-great-uncle emigrated from what was then India (now part of Pakistan) for work building roads and railways in British-controlled Kenya. Eventually his nephew — Suri’s grandfather — followed.<br />
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Suri’s father was born in Kenya and obtained an extensive education, receiving an engineering degree in Britain, then returning to Kenya. Her mother, a native of India who moved to Kenya after marrying, is a doctor.<br />
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Suri was a good student and, having overcome her initial trepidation about economics, found the subject more and more to her liking. “I had an amazing economics teacher in high school,” Suri says. She was accepted to study economics at Cambridge University, where Suri says she got an excellent technical education. But upon graduating, she adds, “I wanted to know more about developing countries.”</p>
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<p>To remedy that, Suri decided to pursue a master’s degree in international and development economics at Yale University, thinking she would go into policy work of some kind. Instead, she wound up staying for a PhD, spurred on by mentors including her main thesis adviser, Michael Boozer. She emerged with a thesis consisting of three papers in the microeconomics of developing countries, and got a job offer after a visit to MIT Sloan that she remembers being full of engaging conversations with her future colleagues.<br />
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“I remember having a very heated discussion with Roberto [Rigobon, an MIT Sloan professor] about one of the technical aspects of my paper, which was fun,” Suri says. “You get this gut feeling, which is hard to explain, and I just felt this would be the right place for me.”<br />
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In truth, it was not Suri’s first opportunity to join the Institute; she had been accepted to MIT for undergraduate study. But the second time was the right one.<br />
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“My mother said it was destiny, and that I had to accept the job offer,” Suri jokes.<br />
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<strong>How voters vote</strong><br />
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Suri’s PhD work pointed the way to some of her most successful research at MIT. For instance, one of her papers explored informal risk-sharing arrangements in Kenya, establishing that while such practices have long existed, they have not always been fully efficient.<br />
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M-PESA had not been invented at that time, but when it was introduced in 2007, “the mobile-money research was a natural fit,” Suri says. Her work, often done in collaboration with economist William Jack of Georgetown University, has found that about half of the Kenyan households surveyed report income shocks within the past six months, and that households without access to M-PESA must cut their spending by about 7 percent more when faced with shocks.<br />
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Suri’s current research is delving into Kenyan politics in multiple ways. In one recent working paper, with two co-authors — Thomas Stoker of MIT Sloan and Benjamin Marx, a PhD candidate in the Department of Economics — Suri reported that ethnic alliances influence whether local politicians favor landlords or tenants. More recently, she has been working on a research project, together with Marx and Vincent Pons, also a PhD candidate in economics at MIT, that is studying voter participation in Kenya’s general elections of this past March. Kenya has had past elections tainted by corruption problems and marred by violence, such as in 2007; this March, the country attempted to hold cleaner elections with more local and regional offices on the slate. Suri and her co-researchers designed a field experiment in which about 1 million citizens were texted, as a prompt for voting; the team is still analyzing the data.<br />
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“We’re trying to look at what the [country] can do to make sure it has better elections,” Suri says. So while she only sometimes goes back to Kenya, she is still trying to give back.</p>
Tavneet SuriEconomics, Africa, Finance, Voting and electionsWhen the job search becomes a blame gamehttp://newsoffice.mit.edu/2014/when-the-job-search-becomes-a-blame-game-0127
MIT professor’s book explores how white-collar job hunters in the U.S. blame themselves unnecessarily — and suffer as a result — when they cannot find work.Mon, 27 Jan 2014 05:00:01 -0500Peter Dizikes, MIT News Officehttp://newsoffice.mit.edu/2014/when-the-job-search-becomes-a-blame-game-0127<p>Searching for a job is tough — and the nature of the hiring process in the United States makes matters far tougher, and more emotionally fraught for workers, than it needs to be.<br />
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That is the central assertion of MIT’s Ofer Sharone in a new book based on his in-depth study of the American and Israeli white-collar labor markets, which operate very differently.&nbsp;<br />
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In the U.S., Sharone says, job hunts emphasize the presentation of personal characteristics; job seekers play, in his terms, a “chemistry game” with prospective employers. In Israel, by contrast, the job-placement process is more formally structured and places greater emphasis on objective skills.<br />
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As a result, white-collar workers in the U.S. are more likely to take their job-market struggles personally, and find it harder to sustain searches.&nbsp;<br />
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“It’s very painful to keep getting rejected,” says Sharone, an assistant professor at the MIT Sloan School of Management. Moreover, widespread self-help advice for job seekers, he believes, “unintentionally exacerbates this problem” by encouraging unemployed workers to believe they entirely control their job-search outcomes.&nbsp;<br />
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Examples of American workers taking their job-search struggles personally abound from the interviews Sharone conducted during his research. Consider Nancy, a former venture capitalist, who told Sharone that when she struggled to find a new position, “I started to feel there was something wrong with how I interviewed. And then, something wrong with me.” Chris, a marketer, confided to Sharone that “the hardest thing is esteem, confidence. It’s killed.” And sometimes job-search struggles turn into disastrous, all-consuming personal problems: Richard, an accountant unemployed for a year, attempted suicide, saw his marriage dissolve, and told Sharone that his job search was a “terrible emotional experience.”<br />
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All of this constitutes a significant social issue at a time when, according to estimates, 4.1 million Americans in the labor market have been unemployed for more than six months. Moreover, some studies have shown that these workers have a harder time attracting interest from employers as a result of their time out of work.<br />
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“These are people who never thought this could happen to them,” Sharone adds. “They are educated, they have experience, they are exactly the people our society makes out to be the winners.”<br />
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<strong>Hiring practices and job-seeking experiences</strong><br />
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Sharone’s book, “Flawed System/Flawed Self: Job Searching and Unemployment Experiences,” has just been published by the University of Chicago Press.<br />
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A sociologist by training, Sharone decided to conduct a comparative study of hiring practices in the two countries in part because they both have thriving information-economy sectors: The San Francisco area and Tel Aviv have the world’s densest concentrations of high-tech firms, for instance. In researching the book, he conducted scores of in-depth interviews with job seekers, was given access to job-search support organizations, and analyzed job-search literature in both places.<br />
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This cross-cultural comparison led Sharone to conclude that while joblessness is almost always difficult, it is experienced differently in different national contexts.<br />
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“In both [the U.S. and Israel], job seekers become demoralized, but at different rates,” Sharone says. “This is an unintended consequence of the hiring system.”<br />
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In Israel, companies seeking employees more often outsource hiring to third-party firms that screen applicants, conduct pre-employment tests, and sharply winnow the pool of candidates before face-to-face contact between prospective employers and employees. Israelis may feel those tests are unfair, but tend to blame the system for their inability to get rehired.<br />
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“In Israel, nobody was blaming themselves,” Sharone says. By contrast, a majority of Americans he talked to “would confide fears about themselves.”<br />
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Intriguingly, Sharone’s research reveals that Americans do not blame themselves for losing jobs in the first place, but soon look inward if they do not land new ones.<br />
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“People talk about the layoffs in external terms, about outsourcing, or corporate restructuring, or the economy,” Sharone says. “But things really switch when they talk about why they are having trouble finding new jobs.”<br />
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Often, job-hunting Americans soon find fault with their own personalities, networking skills, or lack of career direction, and become distressed by the “emotional labor” of looking for work.<br />
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In Sharone’s estimation, the litany of popular books and materials offering advice to job seekers along self-help lines may make things worse for the long-term unemployed: Along with helpful tips about cover letters or job interviews, he says, come self-help dictums about taking control of one’s life that are meant to motivate and inspire but can backfire by reinforcing workers’ fears that they are to blame for their own job-market problems.<br />
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“This advice resonates in the U.S. because it fits the institutions of hiring,” Sharone observes. However, he adds, “It can backfire when applied to someone who is six months unemployed, and looking tirelessly for a job.”&nbsp;<br />
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<strong>A new research program to study job seekers</strong><br />
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Sharone’s work has been well received by other scholars. Michele Lamont, a sociologist at Harvard University, calls the new book “an insightful analysis of the experience of unemployment in the United States and Israel,” and says it “illuminates the aspects of job-searching experiences that are generally ignored or misunderstood.”<br />
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Sharone’s follow-up work aims to find new ways of assisting the unemployed in the job-search process. “Nothing about these unemployment experiences is inevitable,” as he writes in the book.<br />
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To that end, Sharone has embarked on a new research program, called the Institute for Career Transitions, designed to study job-search problems in a new way. Working with economist Rand Ghayad of Northeastern University, Sharone is monitoring the job searches of more than 100 workers and matching many of them with career advisers in an effort to evaluate whether more personalized job-search support is effective.<br />
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“We want to research what are the most effective, most promising ways to support this group,” Sharone says.</p>
Cover of “Flawed System/Flawed Self: Job Searching and Unemployment Experiences."Economics, Unemployment, JobsHow the ‘Matthew Effect’ helps some scientific papers gain popularityhttp://newsoffice.mit.edu/2014/how-the-matthew-effect-helps-some-scientific-papers-gain-popularity-0127
Fine-grained research shows boost for leading-edge and low-profile work in the life sciences happens after authors are honored.Mon, 27 Jan 2014 05:00:00 -0500Peter Dizikes, MIT News Officehttp://newsoffice.mit.edu/2014/how-the-matthew-effect-helps-some-scientific-papers-gain-popularity-0127<p>Do scientific papers written by well-known scholars get more attention than they otherwise would receive because of their authors’ high profiles?<br />
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A new study co-authored by an MIT economist reports that high-status authorship does increase how frequently papers are cited in the life sciences — but finds some subtle twists in how this happens.<br />
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“We found that there was an effect of status,” says Pierre Azoulay, an associate professor at the MIT Sloan School of Management, and co-author of a paper on the subject, published this month in the journal <i>Management Science</i>. But that effect, he adds, is not “overwhelming.”<br />
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The study reports that citations of papers increase by 12 percent, above the expected level, when their authors are awarded prestigious investigator status at the Howard Hughes Medical Institute (HHMI), a major private research organization. However, certain kinds of research papers are boosted more than others by the increased prestige that accompanies the HHMI award, Azoulay notes.<br />
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“We find much more of an effect on recent papers, published in a short window before the prize,” Azoulay says. Moreover, he adds, the greatest gains come for papers in new areas of research, and for papers published in lower-profile journals. Younger researchers who had lower profiles previously were more likely to see a change as well.<br />
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“The effect was much more pronounced when there was more reason to be uncertain about the quality of the science or the scientist before the prize,” Azoulay observes.<br />
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<strong>Identifying the ‘Matthew Effect’</strong><br />
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The paper, titled, “Matthew: Effect or Fable?” was co-authored by Azoulay, Toby Stuart of the University of California at Berkeley, and Yanbo Wang of Boston University. The title references the “Matthew Effect,” a term coined by sociologist Robert K. Merton to describe the possibility that the work of those with high status receives greater attention than equivalent work by those who are not as well known.&nbsp;<br />
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Positively identifying this phenomenon in scientific paper citations is difficult, however, because it is hard to separate the status of the author from the quality of the paper. It is possible, after all, that better-known researchers are simply producing higher-quality papers, which get more attention as a result.<br />
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But Azoulay, Stuart, and Wang have a way to address this issue: They look at papers first published before the authors became HHMI investigators, then examine the citation rates for those papers after the HHMI appointments occurred, compared to a baseline of similar papers whose authors did not receive HHMI appointments.<br />
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More specifically, each paper in the study is paired with what Azoulay calls a “fraternal twin,” that is, another paper published in the exact same journal, at the same time, with the same initial citation pattern. For good measure, the authors of the papers in this comparison group were all scientists who had received other early-career awards.<br />
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In all, from 1984 through 2003, 443 scientists were named HHMI investigators. The current study examines 3,636 papers written by 424 of those scientists, comparing them to 3,636 papers in the control group.<br />
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“You couldn’t tell them [the pairs of papers] apart in terms of citation trajectories, up until the time of the prize,” Azoulay says.<br />
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Beyond the overall 12 percent increase in citations, the effect was nearly twice as great for papers published in lower-profile journals. Alternately, Azoulay points out, “If your paper was published in <i>Cell</i> or <i>Nature</i> or <i>Science</i>, the HHMI [award] doesn’t add a lot.”<br />
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<strong>Toward the scientific study of scientists</strong><br />
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Other researchers think the study adds value to the burgeoning data-based literature on the work of scientists. Benjamin Jones, a professor at Northwestern University’s Kellogg School of Management who has read the paper, says the study contains “compelling empirical evidence” and “strongly suggests that eminence itself matters” when it comes to recognition of published papers.<br />
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Moreover, Jones adds, it is conceivable that the careers of scientists “might diverge substantially on account of the Matthew Effect, rather than due to the quality of the work itself. This possibility, among others, are interesting avenues for further research, motivated by Azoulay, Stuart, and Wang’s findings.”<br />
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As Azoulay acknowledges, scientists themselves are not always entirely comfortable with studies of the citations given papers, since some scientists may feel the quality of some papers may not be represented by citation data in the first place; worthy research can escape wide notice for extended periods of time.<br />
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Still, Azoulay and other scholars have used citation data to glean new insights and quantify observations about the scientific enterprise. For instance, drawing on his own proprietary database of more than 12,000 life scientists, Azoulay has found that bioscience advances are encouraged by longer-term grants with more freedom for researchers, and that physical proximity among scientists increases citation rates, among other things.<br />
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The study behind this month’s paper was funded in part by the National Science Foundation.</p>
Economics, ResearchMobile money helps Kenyans weather financial stormshttp://newsoffice.mit.edu/2014/mobile-money-helps-kenyans-weather-financial-storms-0122
New study shows how electronic cash transfers help people cope with income problems.Wed, 22 Jan 2014 05:00:00 -0500Peter Dizikes, MIT News Officehttp://newsoffice.mit.edu/2014/mobile-money-helps-kenyans-weather-financial-storms-0122Only about one-fourth of Kenyans have access to a traditional bank, and many people in the country farm for a living. Add those things together, and the result is that a large number of Kenyans are vulnerable to unpredictable income fluctuations. <br /><br />But a new study co-authored by MIT economist Tavneet Suri shows that a growing form of electronic payments is helping Kenyans weather these financial problems by letting them informally borrow and lend money more easily. The electronic payments system, known as M-PESA, was introduced in 2007 and is now used by at least 70 percent of households in the country<br /><br />In a new paper published in the <i>American Economic Review</i>, titled “Risk Sharing and Transaction Costs,” Suri and her co-author, William Jack of Georgetown University, show that income shocks force households without access to M-PESA to reduce their consumption by 7 percent more than households in the M-PESA network. That means the electronic money-transfers let people smooth out, as economists say, their spending — meaning they are less likely ever to have to cut back on paying for essential needs. <br /><br />“The people who use M-PESA have a smaller drop in consumption when something bad happens,” says Suri, an associate professor of applied economics at the MIT Sloan School of Management. “They’re more likely to get money from their friends and family, and they receive from more different people.”<br /><br /><strong>Informal insurance networks</strong><br /><br />As Suri and Jack emphasize, the agricultural nature of the Kenyan economy undergirds the sudden rise in M-PESA use. Droughts, storms, and other crop problems mean income can be quite irregular for millions of Kenyans; as a result, they don’t know how much money they will make, and save, from season to season or month to month. Many Kenyans also face financial crises due to health problems. In all, about 50 percent of households in the study reported serious negative income shocks in the six months preceding the survey.<br /><br />“They face very high-risk environments and they don’t have the tools we have to deal with risk,” Suri says. “They also don’t have government programs like unemployment insurance or health insurance, and they don’t have private insurance either. So they end up making deals with each other.”<br /><br />In Kenya — as in many developing countries — neighbors, friends, and relatives often rely on informal agreements to make loans with one another when times are hard. However, those networks can be strained by geography: People are most likely to be in contact with other people who live close to them, and use those contacts as part of their risk-sharing networks. But that proximity means that the same environmental or weather problems can diminish the wealth of an entire network. <br /><br />“If I’m in the village next door and we both have a drought, then you can’t help me and I can’t help you,” Suri points out. <br /><br />So use of M-PESA has flourished, up from 43 percent of households two years ago. Mobile phone usage is far more prevalent in Kenya than traditional banking is, and the system lets people transfer money by text message. Moreover, as Suri and Jack have found, the average distance over which an M-PESA operates is 150 to 200 kilometers, which means people are easily able to tap into money transfers from distant sources.<br /><br /><strong>Connecting everywhere, not just the capital</strong><br /><br />Suri and Jack conducted their study over two years, evaluating 3,000 households in areas representing 92 percent of Kenya’s population. And they uncovered additional geographic patterns about the electronic money transfers: Not only is the average distance between parties significant, but many of the transfers take place entirely within rural areas. In short, money transfers are not just made from wealthier urban Kenyans to their poorer rural friends and relatives. <br /><br />“Everybody assumes it’s just money going out from the capital, Nairobi, and that’s not true,” Suri says. “There are a lot of local transfers, this is not just [people in] the big city sending money.”<br /><br />Other scholars say the results are interesting, and suggest follow-up questions about the larger impact, if it can be pinpointed, of mobile technologies. <br /><br />“It's intriguing to observe that this cost reduction allows families and friends to virtually fully insure themselves against negative events — from crop failure to health shocks — even though access to formal insurance is very limited,” says Francis Vella, an economist at Georgetown University who has read the paper. <br /><br />However, Vella adds, “Moving forward, it will be important to ask if, as well as helping people share their resources more efficiently, mobile technology can increase the income levels of poor people, and indeed whether it can help them escape poverty. Identifying such an impact will be challenging, but it could help to validate opinions that until now have been aspirational at best.”<br /><br />Suri has studied mobile money in Kenya extensively in recent years, but some of her new research will take her in different directions. Among other things, she is now studying the financing of small-scale distributed solar power in areas of Kenya without either a formal grid or established banking systems; she has also been examining housing prices in urban neighborhoods in Kenya, and the impact of new technologies on voter mobilization.Economics, Development economics, Finance, Personal finance, AfricaGruber outlines key upcoming moments in Affordable Care Act rollouthttp://newsoffice.mit.edu/2014/gruber-outlines-key-upcoming-moments-in-affordable-care-act-rollout-0110
MIT expert weighs in on health plan’s status as legislation becomes reality.Fri, 10 Jan 2014 17:24:51 -0500Peter Dizikes, MIT News Officehttp://newsoffice.mit.edu/2014/gruber-outlines-key-upcoming-moments-in-affordable-care-act-rollout-0110<p>The closely watched rollout of the Affordable Care Act, which provides health insurance for all U.S. citizens, will face at least three key mileposts in 2014, MIT economist Jonathan Gruber said in a public talk on campus Thursday afternoon.<br />
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Gruber, a health-care expert who worked with the Obama administration in developing the program, pointed to the March 31 enrollment deadline, when he expects large numbers of Americans to sign up for health insurance plans, as one good moment for evaluating the success of the act.<br />
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In Massachusetts, where a similar state-run plan has existed for several years, Gruber noted, a huge portion of enrollees registered for individual insurance on the state-run exchange, a portal to the plans in the market, just before the deadline arrived.&nbsp; &nbsp;<br />
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“If you look at the experience in Massachusetts, right before the deadline is when everyone signs up,” said Gruber, a professor of economics at MIT. “So we’ll see a lot of people [nationally] signing up right before March 31 … and I think we’re going to get probably on the order of 5 [million] to 7 million people in these exchanges.” About 2 million people so far, Gruber noted, have signed up through exchanges or through Medicaid.<br />
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Additionally, Gruber said, the period around the end of May and beginning of June, when private insurers set their rates for the coming year, will be a telltale indicator of the plan’s impact on the pocketbooks of Americans.<br />
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“If insurers come and say, “We’re going to raise rates 5, 7, 8 percent, then that’s a huge victory,” Gruber asserted. “That’s … a typical annual growth in insurance premiums, it says it’s basically a stable market.” There is no legal limit on the extent to which insurers can raise rates, but increases of 10 percent or more are subject to review by government regulators.<br />
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Finally, he added, by late fall 2014, surveys should produce copious empirical data on the plan’s rollout, helping policymakers understand how many previously uninsured people are signing up and how many are switching from employer-based programs to individual plans, among other questions.<br />
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“That’s going to be the next big date to keep an eye on,” Gruber said.<br />
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<strong>Bipartisan advocate </strong><br />
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The Affordable Care Act mandates all uninsured Americans to acquire health insurance in the private markets, while providing subsidies and tax credits; it also expands Medicaid, the program to help poor citizens afford health care.<br />
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The implementation of the act has made near-constant headlines in recent months, largely because of glitches with healthcare.gov, the government website through which many Americans attempted to sign up for care starting on Oct. 1.<br />
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Gruber called those problems “an IT fiasco,” but added that “it doesn’t look like it’s necessarily a long-term crisis for these exchanges” — although he acknowledged that many Americans have faced delays of six weeks or more in the enrollment process. &nbsp;<br />
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Gruber’s talk, titled “Obamacare: Past, Present, and Future,” was open to the public and delivered to an audience of about 120 people in MIT’s Building 6. It was sponsored by the Department of Economics as part of its programming during MIT’s Independent Activities Period, which runs between semesters.<br />
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Gruber, a longtime specialist in health-care research, worked with then-Massachusetts Gov. Mitt Romney on the development of the state’s novel health-care program, and then consulted for the Obama administration about the similar federal plan; few other people have worked so closely with leaders in both major political parties on the issue.<br />
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“I am totally biased, I am about the least objective observer of this law you could find in the world,” Gruber quipped about his advocacy of the Massachusetts program. “Nonetheless, if you look at the facts, I think it’s been, by the objective facts, a success.” He noted that about two-thirds of formerly uninsured residents are now covered, while premiums for individual insurance have dropped by about 50 percent. About two-thirds of Massachusetts residents support the system, according to polls.<br />
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<strong>Still on the table: Medicaid adoption — or rejection</strong><br />
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Gruber also emphasized that states’ adoption of Medicaid expansion is an important facet of the plan to monitor. The Affordable Care Act offers full federal funding of Medicaid (an expense that is normally split 50-50 between the federal government and the states) for three years, an amount that declines to about 90 percent thereafter. Yet governors in 26 states have declined to accept the funding, a stance made possible by a 2012 Supreme Court ruling — and one Gruber labeled as “political malpractice.”<br />
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“There is no citizen in a state like Florida that is worse off if they expand Medicaid,” Gruber suggested. “None. All of the [uninsured] get health insurance. Everyone else gets enormous federal stimulus injected into their economy.” He added: “That’s another thing to keep an eye on: How long are states going to hold out?”<br />
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Gruber also discussed what he sees as a vital part of health care in general: controlling future costs. The Affordable Care Act attempts to do this through a variety of measures, some of which attempt to evaluate the efficacy of care. &nbsp;<br />
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“Cost control is a ton harder than [expanding] coverage,” Gruber observed. Overall health-care spending has increased from around 4 percent of the nation’s GDP in 1950 to about 17 percent today. Gruber said the improved quality of health care in that time has probably made that increased spending a sound investment, but suggested that a similarly large increase over the next half-century would probably not be subsidized by U.S. taxpayers.<br />
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Still, Gruber argued, the value of the legislation can be seen in moral and practical terms, by limiting the catastrophic financial problems uninsured Americans have faced when dealing with serious illness: “We joined the league of industrialized nations who guarantee our citizens cannot be bankrupted by medical costs,” he said.</p>
Jonathan GruberHealth care, Economics, Medicine, Medicaid/Medicare, Faculty, Special events and guest speakersBetter bankruptcies for bankshttp://newsoffice.mit.edu/2014/better-bankruptcies-for-banks-0110
New study shows that more transparent accounting helps bidders, lowers costs when financial institutions fail.Fri, 10 Jan 2014 05:00:00 -0500Peter Dizikes, MIT News Officehttp://newsoffice.mit.edu/2014/better-bankruptcies-for-banks-0110Good accounting isn’t just a hallmark of a well-run company: As a new study of the banking industry by an MIT professor shows, transparent financials help ensure stability when banks fail, and can even reduce costs for consumers or taxpayers when the government must oversee the bankruptcies of financial firms.<br /><br />That has happened a lot lately, especially during the recent economic and financial crisis: From 2008 through 2010, the U.S. government was forced to act as the liquidating agent for more than 300 banks. But as MIT accounting professor Joao Granja shows in a newly published paper, the banks with better disclosure practices received higher bids for their assets, and regulators were able to conduct those liquidations more cheaply. <br /><br />Overall, Granja finds, failing banks that had filed documents with the Securities and Exchange Commission (SEC) saw a 7.8 percentage point increase in the portion of their assets bought by other firms during bankruptcy auctions, since potential buyers were better able to understand and trust the value of the assets. <br /><br />“More transparency reduces information asymmetry, making bidders more willing and more confident about bidding for these assets,” says Granja, an assistant professor of accounting at the MIT Sloan School of Management.<br /><br />Meanwhile, banks that regularly filed SEC documents were 4.5 percentage points less expensive for regulators to handle in bankruptcy than banks that had not filed such documents. When institutions are more transparent and better scrutinized by market participants, outside parties do not have to spend as much time digging around in an effort to reveal the true state of a financial institution’s books. <br /><br />“There is a social benefit here,” Granja adds. “It’s less costly for the regulators to close it, [costs that] ultimately might actually fall on the taxpayer.”<br /><br /><strong>Helping buyers and depositors</strong><br /><br />The paper, titled “The Relation between Bank Resolutions and Information Environment,” appears in the latest issue of the <i>Journal of Accounting Research</i>, a peer-reviewed publication in the field. <br /><br />Bank bankruptcies are administered by the Federal Deposit Insurance Corporation (FDIC), which is mandated by Congress with finding the least costly means of administering bankruptcy proceedings. Consumers, such as bank depositors, also have a strong interest in seeing bank failings run in a quick, orderly manner. When a bank fails, “They [the FDIC] immediately want to close it and sell it to a healthy bank, so that there’s no unrest for the depositors,” Granja notes. <br /><br />But not all bankruptcies are alike. Banks are regulated by a variety of agencies, but those registered with the SEC, Granja contends in the paper, undertake “a sizeable increase in financial transparency,” since they have to produce regular discussion and analysis of their activities in annual reports, and must file forms with every unscheduled but materially important event. <br /><br />In conducting his study, Granja scrutinized the bankruptcy auctions for 322 banks that failed between Jan. 1, 2008, and Dec. 31, 2010. Sales of assets for troubled banks often happen in the last two weeks before a bank is set to close, and potential buyers have a relatively short timeframe, just a few days, to conduct due diligence. That means consistent past financial disclosure is all the more significant. <br /><br />For this reason, as Granja found, an average 80 percent of the assets of banks not registered with the SEC sold at FDIC auctions, but 86 percent of assets sold among banks that had regularly filed SEC documents. <br /><br />“When the failed bank was more transparent, bidders are willing to take on a higher percentage of the assets of the failed bank,” Granja says. <br /><br />Scholars in the field believe Granja’s research is novel and valuable. Christian Leuz, an economist at the University of Chicago’s Booth School of Business who has read the paper, heralds its “clever research design,” and says it “provides convincing evidence on a benefit of disclosure regulation for banks that previously had not been noted: Greater transparency … makes bank resolution in the case of failure … less costly. This is a very interesting and important finding. It highlights that transparency has tangible benefits for the financial system.”<br /><br /><strong>Best practices for the next crisis</strong><br /><br />U.S. economic history reveals a series of waves of failing banks, a phenomenon that was pronounced in the 1980s, for instance, as well as the 2008 to 2010 period. Granja believes that studying best practices for bankruptcy proceedings can help smooth the financial waters in case another such wave roils the banking industry. <br /><br />And while the FDIC’s funding comes, in part, from fees banks pay, higher costs for the agency could be passed on to consumers, or in some circumstances could even require taxpayer assistance. Greater transparency by banks now could thus help insulate citizens from future costs. <br /><br />“There might be [cause] for policy action to correct this, and for the regulators to require more transparency and disclosure on the part of the banks,” Granja concludes.<br />Banking, Economics, Finance, Global economyPredicting the future of global water stresshttp://newsoffice.mit.edu/2014/predicting-the-future-of-global-water-stress
MIT researchers find that by 2050 more than half the world’s population will live in water-stressed areas and about a billion or more will not have sufficient water resources.Thu, 09 Jan 2014 13:00:00 -0500Alli Gold Roberts | MIT Joint Program on the Science and Policy of Global Changehttp://newsoffice.mit.edu/2014/predicting-the-future-of-global-water-stressPopulation growth and increasing social pressures on global water resources have required communities around the globe to focus on the future of water availability. Global climate change is expected to further exacerbate the demands on water-stressed regions. In an effort to assess future water demands and the impacts of climate change, MIT researchers have used a new modeling tool to calculate the ability of global water resources to meet water needs through 2050.<br /><br />The researchers expect 5 billion (52 percent) of the world’s projected 9.7 billion people to live in water-stressed areas by 2050. They also expect about 1 billion more people to be living in areas where water demand exceeds surface-water supply. A large portion of these regions already face water stress — most notably India, Northern Africa and the Middle East.<br /><br />The study applies the MIT Integrated Global System Model Water Resource System (IGSM-WRS), a modeling tool with the ability to assess both changing climate and socioeconomics — allowing the researchers to isolate these two influencers. In studying the socioeconomic changes, they find population and economic growth are responsible for most of the increased water stress. Such changes will lead to an additional 1.8 billion people globally living in water-stressed regions.<br /><br />“Our research highlights the substantial influence of socioeconomic growth on global water resources, potentially worsened by climate change,” says Adam Schlosser, the assistant director of science research at the Joint Program on Global Change and lead author of the study. “Developing nations are expected to face the brunt of these rising water demands, with 80 percent of this additional 1.8 billion living in developing countries.”<br /><br />Looking at the influence of climate change alone, the researchers find a different result. Climate change will have a greater impact on water resources in developed countries. This is because, for instance, changes in precipitation patterns would limit water supplies needed for irrigation.<br /><br />When researchers combine the climate and socioeconomic scenarios, a more complicated picture of future water resources emerges. For example, in India, researchers expect to see significant increases in precipitation, contributing to improved water supplies. However, India’s projected population growth and economic development will cause water demands to outstrip surface-water supply.<br /><br />“There is a growing need for modeling and analysis like this, which takes a comprehensive approach by studying the influence of both climatic and socioeconomic changes and their effects on both supply and demand projections,” says Schlosser. “Our results underscore this need.”<br /><br />The MIT team plans to continue this work by focusing on specific regions and conducting more detailed analysis of future climate changes and risks to water systems. They plan to refine and add to the model as they research other regions of the globe.Population growth, economic development and climate change are increasing stress on global water resources.Climate, Economics, Population, WaterStudy: Having Medicaid increases emergency room visitshttp://newsoffice.mit.edu/2013/study-having-medicaid-increases-emergency-room-visits
Unique study on Oregon’s citizens sheds light on critical care in the U.S.Thu, 02 Jan 2014 19:00:00 -0500Peter Dizikes, MIT News Officehttp://newsoffice.mit.edu/2013/study-having-medicaid-increases-emergency-room-visits<p>Adults who are covered by Medicaid use emergency rooms 40 percent more than those in similar circumstances who do not have health insurance, according to a unique new study, co-authored by an MIT economist, that sheds empirical light on the inner workings of health care in the U.S.<br />
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The study takes advantage of Oregon’s recent use of a lottery to assign access to Medicaid, the government-backed health-care plan for low-income Americans, to certain uninsured adults. The research examines emergency room records for roughly 25,000 people over 18 months.<br />
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“When you cover the uninsured, emergency room use goes up by a large magnitude,” says Amy Finkelstein, the Ford Professor of Economics at MIT and a principal investigator of the study, along with Katherine Baicker, a professor at the Harvard School of Public Health.<br />
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The study, which is being published today in the journal <i>Science</i>, also documents that having Medicaid consistently increases visits to the emergency room across a range of demographic groups, types of visits, and medical conditions, including types of conditions that may be most readily treatable in primary-care situations.<br />
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“In no case were we able to find any subpopulations, or type of conditions, for which Medicaid caused a significant decrease in emergency department use,” Finkelstein adds. “Although one always needs to be careful generalizing to other settings, these results suggest that other Medicaid expansions are unlikely to decrease emergency room use.”<br />
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<strong>What’s the policy upshot? </strong><br />
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The study is highly relevant to the current landscape in the U.S.: With the implementation of the Affordable Care Act, Medicaid is expanding in many states to cover a population similar to the one that gained Medicaid through Oregon’s lottery. The results in this paper, however, suggest nuances to the current debates over the expansion of Medicaid, medical costs, and the role of emergency rooms in providing care.<br />
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On one level, the results accord with a traditional economics framework suggesting that insurance, by lowering out-of-pocket costs, would increase the use of medical care. Or, as Finkelstein observes, “If we’ve lowered the price of the emergency department, we would expect people to use it more.”<br />
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However, Medicaid also lowers the out-of-pocket costs of other types of health care, such as primary-care doctors. Some policy analysts have suggested that expanding Medicaid could reduce emergency department visits by the formerly uninsured by bringing them into more regular contact with primary-care doctors and clinics for preventive care. In theory, that could also reduce overall system costs, since urgent care is expensive.<br />
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Indeed, prior work by Finkelstein, Baicker, and others on Oregon’s lottery applicants showed that people who obtain Medicaid increase their use of primary and preventive care. But as Finkelstein points out, the net effect of Medicaid in the study was to also increase use of emergency services.<br />
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Hypothetically, Finkelstein notes, the results “could have gone either way, which makes empirical work all the more important.”<br />
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Other scholars in the field say the study opens the way for further scrutiny of emergency room use. Amitabh Chandra, an economist and professor at the Harvard Kennedy School who has read the paper, praises the study as “exemplary social science,” and says the results underscore our need to learn more about the circumstances in which people use emergency rooms.<br />
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“People are going to want to find out how sick they are,” Chandra says. “The emergency room is a great place to find out. We should not view [use of] the emergency room as a failure of our health-care system.” Instead, he adds, “The big unanswered question is, ‘Which effect is causing them to go to the emergency room?’”<br />
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<strong>Lottery numbers</strong><br />
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The study’s rigor derives from a unique policy the state of Oregon implemented in 2008. State officials, recognizing that they had Medicaid funds for about 10,000 additional low-income adults, developed a lottery to fill those slots, for which about 90,000 Oregonians applied.<br />
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From the viewpoint of academic researchers, the lottery system presented the opportunity for a randomized controlled evaluation of Medicaid, since it created a group of state residents obtaining Medicaid coverage who were otherwise similar, on aggregate, to the applicants who continued to lack coverage.<br />
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“It’s not that we’re the first to look at the effects of Medicaid empirically, but we are the very first to have a randomized controlled trial of the effect of covering the uninsured with Medicaid,” Finkelstein says.<br />
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In Oregon, uninsured adults are eligible for the lottery-based Medicaid program when their annual income falls below the federal poverty level established by the U.S. Department of Health and Human Services, which in 2013 is roughly $11,490 for a single person or $23,550 for a family of four.<br />
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In addition to Finkelstein and Baicker, the co-authors of the <i>Science</i> paper, titled “Medicaid Increases Emergency Department Use: Evidence from Oregon’s Health Insurance Experiment,” were lead author Sarah Taubman of the National Bureau of Economic Research, Heidi Allen of Columbia University’s School of Social Work, and Bill Wright of the Center for Outcomes Research and Education at Providence Health and Services in Portland, Ore.<br />
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It is the latest paper to emerge from an ongoing study, led by Finkelstein and Baicker, of the lottery applicants in Oregon’s Medicaid system. In a 2011 paper published in the <i>Quarterly Journal of Economics</i>, they showed that Medicaid coverage increases doctor visits, prescription drug use, and hospital admissions; reduces out-of-pocket expenses or unpaid medical debt; and increases self-reported good health. In a 2013 paper published in the <i>New England Journal of Medicine</i>, they showed that Medicaid coverage reduces the incidence of depression but does not produce measured improvements in physical health.<br />
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Finkelstein says she has been motivated by the Oregon study, and its reception, to create a new research group, J-PAL North America. Co-founded with Harvard economist Lawrence Katz, the group is meant to encourage randomized evaluations on policies and social issues in the U.S. It is the newest branch of MIT’s Abdul Latif Jameel Poverty Action Lab, which was founded in 2003 to support randomized trials in development economics globally.<br />
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“It’s relatively rare to have this kind of randomized controlled trial on a major [policy] issue,” Finkelstein says. “And I’d like that to become less the exception, and closer to the norm.”</p>
Economics, Health care, Hospitals, Medicaid/Medicare, MedicineA global community dedicated to alleviating poverty gathers at MIThttp://newsoffice.mit.edu/2013/a-global-community-dedicated-to-alleviating-poverty-gathers-at-mit
JPAL@10 event celebrates the 10th anniversary of the Abdul Latif Jameel Poverty Action Lab.Mon, 23 Dec 2013 05:00:05 -0500School of Humanities, Arts and Social Scienceshttp://newsoffice.mit.edu/2013/a-global-community-dedicated-to-alleviating-poverty-gathers-at-mitMore than 1,000 people from across the globe gathered at MIT on Dec. 7 to celebrate the 10th anniversary of the Abdul Latif Jameel Poverty Action Lab (J-PAL). The program featured talks, stories from the field, videos, and panel discussions with researchers, policymakers, staff, and partners — and a musical tribute from Bono, lead singer of U2 and antipoverty activist, singing "Happy Birthday" to J-PAL via video webcast. <br /><br />Established in 2003 as a research center within the Department of Economics in MIT's School of Humanities, Arts, and Social Sciences (SHASS), J-PAL's founders pioneered the use of randomized controlled trials to test the effectiveness of antipoverty programs. Today, J-PAL comprises a global network of nearly 100 researchers working in 55 countries. <br /><br /><strong>A pioneering approach</strong><br /><br />“J-PAL fits in perfectly with MIT’s mission and values — to make the world a better place through service to humanity,” said MIT President L. Rafael Reif, who addressed the crowd during the morning session of the daylong anniversary conference, J-PAL@TEN, which took place in Kresge Auditorium. “Everyone here is concerned with questions of deep moral importance — and that is how to relieve human poverty and the suffering it creates.”<br /><br />To date, J-PAL has completed 447 randomized evaluations, addressing such questions as: do free bed nets help the fight against malaria? [yes]; does vocational training improve youth employment? [sometimes]; does electronic monitoring improve attendance among health professionals? [no]; and do deworming programs boost school performance? [yes].<br /><br /><strong>Measurable impact</strong><br /><br />The impact of J-PAL’s global network of researchers can be measured in the millions of people around the globe whose lives have been improved through J-PAL research, including 65.6 million who have received subsidized rice, 33.89 million who have received remedial education, and 59.14 million who have benefited from deworming programs.<br /><br /><strong>Extraordinary supporters</strong><br /><br />J-PAL's results do not come easily, J-PAL Deputy Director Iqbal Dhaliwal emphasized in his talk. “Policy is really, really hard to change,” he said. “Institutions have constraints. People are hard to change. People rely on instincts, ideology, and inertia.”<br /><br />Running research projects to provide evidence of what works, and then communicating results to ensure that proven programs are scaled up, takes an extraordinary amount of support. J-PAL Director Abhijit Banerjee used his time on stage to express his gratitude for all the help J-PAL has received in the past decade — beginning with MIT’s support for the lab’s launch.<br /><br />“MIT had faith in us," Banerjee said. He went on to credit J-PAL’s growth to financial support — from the Jameel family, SHASS, and others — and to the on-the-ground legwork provided by the lab’s many partners in impoverished areas worldwide and the government leaders who put J-PAL’s research findings into action through policy.<br /><br />J-PAL's program areas and number of current projects include:
<ul>
<li>Agriculture — more than 34 projects in 15 countries</li>
<li>Education — more than 106 projects in 29 countries</li>
<li>Energy and Environment — more than 17 projects in 12 countries</li>
<li>Finance and Microfinance — more than 155 projects in 35 countries</li>
<li>Health — more than 103 projects in 31 countries</li>
<li>Labor Markets — more than 50 projects in 22 countries</li>
<li>Political Economy and Governance — more than 95 projects in 26 countries</li>
</ul>
<strong>Many voices </strong><br /><br />J-PAL’s broad spectrum of supporters was reflected in the event’s speaker list, which included:
<ul>
<li>Major donors — notably Mohammed Abdul Latif Jameel, chairman of Abdul Latif Jameel Community Initiatives, after whose late father J-PAL is named;</li>
<li>J-PAL leadership — among them Executive Director Rachel Glennerster, Director Esther Duflo, and Director Banerjee;</li>
<li>Key partners from in-country programs — such as Rukmini Banerji, director of programs for Pratham, an education program for underprivileged children in India, and Juan Cristóbal Beytia Reyes, SJ, chaplain of Techo, which builds housing for the impoverished of Latin America; and</li>
<li>Governmental leaders — among them Martin Hirsch, former high commissioner of France, and Alan Krueger, former chairman of the U.S. Council of Economic Advisers.</li>
</ul>
In addition to those who spoke in person, several supporters sent video messages, including Jim Kim, president of the World Bank, and Jairam Ramesh, India’s minister of rural development.<br /><br /><strong>A compelling mission</strong><br /><br />What drew so many people from as far away as Brazil, India, Tanzania, Saudi Arabia, and Sweden to MIT on a chilly December Saturday? For some, it was simply the power of J-PAL’s mission combined with the demonstrated success of its evidence-based approach. “When I was a student at MIT pursuing my passion in science,” said Tiantian White ’13, “I often struggled thinking how I can apply all the knowledge from my statistics and experimental biology class to poverty alleviation, something I am equally passionate about.” Now working as a policy analyst at J-PAL, White said she has discovered that “the ability to apply the scientific approach to problem-solving and the understanding of rigorous evidence can be tremendously powerful in tackling extreme poverty.”<br /><br /><strong>Persistence</strong><br /><br />Hearing about J-PAL’s humble beginnings was particularly inspiring, White said. “We sometimes forget how much we can do to make this world a better place,” she said. “The J-PAL story at J-PAL@TEN is one that reminds us of that fact.”<br /><br />Other attendees were drawn as much by the speaker list as by J-PAL’s record of accomplishment. Tracy Ware, for example, came to see J-PAL Director Esther Duflo. “She has rock-star status,” said Ware, who works for Empower Dalit Women of Nepal in North Waltham, Mass., and who took the massive open online course “The Challenges of Global Poverty” that Duflo teaches with Banerjee.<br /><br />In her talk, titled “Getting It Wrong, Trying Again, Getting It Right (Sometimes),” Duflo focused on the challenges J-PAL faces going forward rather than highlighting the accomplishments of the past. “How have we been so slow?” she said. “One hundred sixty-five million [impacted by J-PAL] is really very little in comparison to the hundreds of millions who stand in need.”<br /><br />But although J-PAL’s progress can seem slow when measured against the scale of the world’s problems, it is nonetheless impressive. “In 10 years I’ve learned some things," Duflo said. "Our role is to chip away at the problem long enough and persistently enough so we can identify the levers that can improve the situation. To change lives we have to change minds. And I’m pretty sure we can do that.”<br /><br /><strong>Steady growth</strong><br /><br />J-PAL’s chipping-away has clearly been relentless. From one small office at MIT in 2003, the lab has grown to cover the world with six regional offices. This summer, the organization launched the newest of the six: J-PAL North America.<br /><br />Professor Amy Finkelstein, who directs J-PAL North America with Professor Lawrence Katz of Harvard, emphasized in her talk that J-PAL’s methods can have significant impact even in the developed world. Describing her work on the Oregon Health Insurance Study, a randomized study of the effects of expanding access to health insurance, Finkelstein noted that something important changes when a program’s results are measured scientifically. “What’s really gratifying to me is that no one is arguing about the results; they’re arguing about what it means,” she said.<br /><br /><strong>The next decade begins</strong><br /><br />To wrap up the day, Banerjee, Duflo, and Glennerster joined fellow J-PAL Director Benjamin Olken in a panel discussion titled “J-PAL: The Next Decade.” Olken said he expects J-PAL to increase its involvement with governments to ensure that policies have strong evidentiary support. And Banerjee said he expects J-PAL’s research to take off in new directions. “People will think of ways to measure things we don’t think can be measured, like corruption,” he said.<br /><br />Since J-PAL's affiliated professors set their own research agendas, it’s impossible to predict exactly what questions J-PAL will tackle next, Glennerster pointed out. "We have a belief in a bottom-up approach," she said, "and so a large part of our role is to encourage the creativity of the researchers on the ground. That’s where the magic happens."<br /><br />
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<p class="shass">Story prepared by MIT SHASS Communications<br />Editorial and Design Director: Emily Hiestand<br />Senior Writer: Kathryn O’Neill</p>Children participating in a J-PAL education project in India.Abdul Latif Jameel Poverty Action Lab (J-PAL), Faculty, Poverty, EconomicsUncovering the Costs of Climate Mitigationhttp://newsoffice.mit.edu/2013/uncovering-the-costs-of-climate-mitigation
MIT investigators search for the most informative methods to measure the costs of mitigating climate change.Fri, 20 Dec 2013 16:00:00 -0500Alli Gold Roberts | Joint Program on the Science and Policy of Global Changehttp://newsoffice.mit.edu/2013/uncovering-the-costs-of-climate-mitigationPolicies to curb greenhouse gas emissions will come at a cost to energy producers, industry and consumers. Policymakers around the globe are working to determine the most effective and cost efficient way to reduce these emissions — from renewable energy subsidies and fuel efficiency standards to carbon taxes and cap-and-trade policies.<br /><br />To tackle this challenge, Sergey Paltsev from MIT and Pantelis Capros from the National Technical University of Athens have come together to assess which methods and metrics are best for calculating the cost of climate policies. In their study, published this week in <i>Climate Change Economics</i>, they find that there is no one ideal metric for climate mitigation policies, but measuring changes in consumer welfare is one of the most appropriate techniques.<br /><br />“With many of these regulations, the total costs are often less visible to consumers because the true costs are not reflected in the price of energy, but distributed to other sectors of the economy,” says Paltsev, the assistant director for economic research at the MIT Joint Program on the Science and Policy of Global Change. “The true measure of the cost of a policy is reflected in the change in consumers’ behavior, something that economists call ‘change in welfare,’ but it is hard to convey this measure to policy makers and general public.”<br /><br />In the study, the researchers compare different concepts that are used to inform the public about the cost implications of climate change. They consider two major modeling types where costs are calculated, energy system models and macroeconomic models. Energy system models focus solely on the energy sector and treat the rest of the economy as a given. Macroeconomic models represent the energy system as part of the entire economy and provide more detailed information on the various sectors. Within these approaches there are a variety of metrics used to calculate the cost of a climate mitigation policy.<br /><br />After studying the cost metrics associated with each modeling approach, the researchers compared the metrics used by a team of international researchers to better understand the impacts of the current EU emissions targets. They find that there are large variations in cost estimates and most metrics are not directly comparable, which makes it difficult for policymakers to interpret the results of these studies.<br /><br />Paltsev says there is no ideal metric for costs, but it’s clear that some approaches are more effective than others. For example, carbon prices and marginal abatement cost curves are unable to reflect the full impact of the policy on the economy. In addition, energy system models do not always take into account the full cost of a climate policy — particularly the economic impacts of policies interacting with one another. The authors recognize that depending on the objectives, other metrics and modeling techniques may be appropriate. They conclude that measuring changes in consumer welfare or consumption is an effective approach that should be used by policymakers to evaluate climate policies.Climate change, Economics, Greenhouse gases, Joint Program on the Science and Policy of Global Change, Energy, Macroeconomics